Escaping strings in Bash using !:q

This amazing Bash trick comes from Pascal Hirsch on Twitter. It goes like this: Enter a line of Bash starting with a # comment, then run !:q on the next line to see what that would be with proper Bash escaping applied.

bash-3.2$ # This string 'has single' "and double" quotes and a $
bash-3.2$ !:q
'# This string '\''has single'\'' "and double" quotes and a $'
bash: # This string 'has single' "and double" quotes and a $: command not found

How does this work? James Coglan explains:

The ! character begins a history expansion; !string produces the last command beginning with string, and :q is a modifier that quotes the result; so I’m guessing this is equivalent to !string where string is "", so it produces the most recent command, just like !! does