EVM has "256bit words". Some cases treat strings shorter than 32 bytes (256 bits) as left-justified ascii (packed into the most significant bytes of the word).

Does this mean that the word value of the string '\*' is equivalent to: 42 << 148 ?

Note that the RLP encoding of the single ASCII character '\*' is two bytes, whereas the RLP encoding of 42 << 148 is different. Are there important edge cases for security and correctness where the EVM word semantics and RLP encodings don't quite match up?