It's not fun when you have to explain it. But basically it is based on the infinite multiverse theory. Since the multiverse splits whenever you make choices, in this case the program would spawn a large number of multiverses each with different combinations of those bits, which means at least one of them would have the exactly the combination we want. If the program destroys the multiverse it is in after it determines it is not correct, only reality that remains is the one with correct combination of bytes. Making it that we will get the code we want on the first try.
You are assuming here that I know what I want. What if there is no obviously correct answer, and even in the Everett branch that generates the optimal content for the file I'll still think it can be improved and tell it to destroy the universe?
I guess yeah. In that condition the algorithm would probably destroy all universe. Although you might be able to set a threshold and not destroy when it is over the threshold.
But situation where you don't know the answer is not for this algorithm as this one came from sorting problem.