Delimiter matching: # inside string not surrounding with #{}

Hello,

Tor wrote to me awhile back that I should document that ....

And if you press “#” inside a string or regular expression, it will surround the text with #{}.

I thought that he meant that if I clicked inside a string (such as "string") and pressed # I would get something like #{"string"}. Instead I get "str#{}ing".

Can someone better explain how to surround text with #{}