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I don't understand your question. You chose to use the string {} when you used it as the option-argument to the -I option. You could have chosen any string you wanted. You chose {}.


No! ...

A single sentence in a man page doesn't stand alone. If you look at the SYNOPSIS section of the xargs man page on macOS you'll see:
SYNOPSIS
xargs [-0opt] [-E eofstr] [-I replstr [-R...