Confusion about #pragma in XC8
#pragma is a directive that sends text information to the compiler, which then interprets it according to the rules of the particular pragma. This text is not C code and does not have to be compatible with it.

The relevant definitions for HFINT1 (found in the file '16f18323.cfgdata') are:-

CWORD:8007:2977:FFFF:CONFIG1
CSETTING:70:RSTOSC:Power-up default value for COSC bits
CVALUE:60:HFINT1:HFINTOSC (1MHz) 


This tells the config pragma that RSTOSC = HFINT1 means 'set memory at address 0x8007 to 0x60 through a mask of 0x70', which puts 0b110 into bits 6-4 of config register 1. 

You should use the defined config names only. Substituting C stye binary numbers will just confuse the pragma.