%0 will never end, but it never creates more than one process because it instantly transfers control to the 2nd batch script (which happens to be itself).
But a Windows pipe creates a new process for each side of the pipe, in addition to the parent process. The parent process can't finish until each side of the pipe terminates. So the main program with a simple pipe will have 3 processes. You can see how the bomb quickly get's out of control if each side of the pipe recursively calls the parent batch!
It's a logic bomb, it keeps recreating itself and takes up all your CPU resources. It overloads your computer with too many processes and it forces it to shut down. If you make a batch file with this in it and start it you can end it using taskmgr. You have to do this pretty quickly or your computer will be too slow to do anything.
%0|%0 is a fork bomb. It will spawn another process using a pipe | which runs a copy of the same program asynchronously. This hogs the CPU and memory, slowing down the system to a near-halt (or even crash the system).
How this works:
%0 refers to the command used to run the current program. For example, script.bat
A pipe | symbol will make the output or result of the first command sequence as the input for the second command sequence. In the case of a fork bomb, there is no output, so it will simply run the second command sequence without any input.
Expanding the example, %0|%0 could mean script.bat|script.bat. This runs itself again, but also creating another process to run the same program again (with no input).