The meaning of “Would you rather have unlimited bacon but no more video games or games, unlimited games, but no more games?”

I was recently asked about the meaning of the phrase

Would you rather have unlimited bacon but no more video games or games, unlimited games, but no more games?

On first glance, this phrase may not seem to work (and it kind of doesn’t – more on that below), but it gets used around the internet and people understand it. So that means it does work. What gives?

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