Here's something similar for comparison, making use of powers of 2 rather than LIKE, and XML rather than string manuipulation.

--preparation

IF OBJECT_ID('tempdb.dbo.#t1') IS NOT NULL DROP TABLE #t1

GO

--/

--structure

CREATE TABLE #t1 (x VARCHAR(MAX))

--/

--data

INSERT INTO #t1 VALUES ('ABC')

INSERT INTO #t1 VALUES ('DEF')

INSERT INTO #t1 VALUES ('GHI')

--/

--parameters

DECLARE @AllowDuplicates BIT

SET @AllowDuplicates = 0

--/

--query

; WITH

a AS (SELECT COUNT(*) AS cnt FROM #t1)

, b AS (SELECT POWER(2, ROW_NUMBER() OVER(ORDER BY x)-1) AS marker, x FROM #t1)

, c AS (SELECT marker, 1 as level, '<x>' + x + '</x>' AS x FROM b UNION ALL

SELECT c.marker + b.marker, c.level + 1, c.x + '<x>' + b.x + '</x>'

FROM b INNER JOIN c ON (@AllowDuplicates = 1 OR b.marker & c.marker = 0)

WHERE c.level < (SELECT cnt FROM a))

, d AS (SELECT ROW_NUMBER() OVER(ORDER BY x) as permutation, cast(x as xml) as xml

FROM c WHERE level = (SELECT cnt FROM a))

SELECT

d.permutation,

ROW_NUMBER() OVER(PARTITION BY d.permutation ORDER BY d.permutation) AS position,

c.value('.', 'varchar(100)') AS value

FROM d CROSS APPLY xml.nodes('//x') T(c)

--/