(file-name-directory #$): How does Emacs know what #$ is?

Question

I see that a few packages, and package.el use (file-name-directory #$). How does Emacs know what directory #$ is? On OSX, that returns Wrong type argument: stringp, nil.

Excerpt from cl-lib.el when installing a package evil-mc through the package manager, which goes into cl-lib-autoloads.el and then Emacs chokes:

;; First line of defense: try to make sure the built-in cl-lib comes earlier in
;; load-path so we never get loaded:
;;;###autoload (let ((d (file-name-directory #$)))
;;;###autoload   (when (member d load-path)
;;;###autoload     (setq load-path (append (remove d load-path) (list d)))))

Answer 1

M-x elisp-index-search RET #$ RET tells us:

   Internally, the dynamic loading of documentation strings is
accomplished by writing compiled files with a special Lisp reader
construct, ‘#@COUNT’.  This construct skips the next COUNT characters.
It also uses the ‘#$’ construct, which stands for the name of this file,
as a string.  Do not use these constructs in Lisp source files; they are
not designed to be clear to humans reading the file.

C-hig (elisp)Docs and Compilation