Yeah, something odds is going one here, testing on 9.3.10 Ubuntu 14.04
\set df ' " d ' " "
select :'df' => " d " "
Removing the last double-quote results in an "unterminated quoted string" error
Apparently the quoting rules for \set need to first be discovered and then added to the documentation.
\set df alpha'beta'delta => alphabetadelta
\set df "alpha'beta'delta" => "alpha'beta'delta"
So adding double-quotes causes the rest of the content to be considered literally but unfortunately the double-quotes themselves become part of the value. Single-quotes by themselves get paired up and removed.
[testing some more]
Got It!
Its the colon that is allowing the single-quotes around the "value" to remain. PostgreSQL read " :'a' " and sees a variable that it might need to resolve - and when it cannot it simply leaves the variable name reference in place.
If not for the colon all of the single-quotes would have been removed as delimiters.
I still think some improvement and or outright fixes could be made here but am going to leave it here for now.
