One could argue that this is just a kind of trick so they can say the next "binary" is actually a "source" file because it happens to be written by a human in ASCII.
Still the phase distinction between what is a source and what is a binary becomes blurry at this low level. I believe the next stage of compiling is to, writing in ASCII represented machine code with comments, to allow for the existence of labels and then compute offsets for jumps to labels. And then more and more features are added until you have a minimal assembler letting you write somewhat machine independent code, and then continuing to work you way up the toolchain.
So at which point does the translation from "source" to "binary" become a real thing and not just a trick of semantics? Is it when we have a machine independent assembly code? Is it when we computed offsets for labelled jumps? It is when we started stripping comments out of the source code?