The operation that is performed here is
n -> n + FromDigits[Reverse[IntegerDigits[n, 2]],2]
After a few steps, the digit sequence obtained is typically reversal symmetric (a generalized palindrome) except for the interchange of 0 and 1, and for the presence of localized structures. The sequence expands by at least one digit every two steps; more rapid expansion is typically correlated with increased randomness. For most initial n, the overall pattern obtained quickly becomes repetitive, with an effective period of 4 steps. But with the initial condition n=512, no repetition occurs for at least a million steps, at which point n has 568418 base 2 digits. The plot below shows the lengths of the successive regions of regularity visible on the right-hand edge of the picture on page 126 over the course of the first million steps.
If one works directly with a digit sequence of fixed length, dropping any carries on the left, then a repetitive pattern is typically obtained fairly quickly. If one always includes one new digit on the left at every step, even when it is 0, then a rather random pattern is produced.