For only 5 chars, I wouldn't bother will all the CTEs and related folderol.

Why not just:

SELECT

ISNULL(CAST(ASCII(SUBSTRING(data, 1, 1)) AS varchar(3)), '') +

ISNULL(CAST(ASCII(SUBSTRING(data, 2, 1)) AS varchar(3)), '') +

ISNULL(CAST(ASCII(SUBSTRING(data, 3, 1)) AS varchar(3)), '') +

ISNULL(CAST(ASCII(SUBSTRING(data, 4, 1)) AS varchar(3)), '') +

ISNULL(CAST(ASCII(SUBSTRING(data, 5, 1)) AS varchar(3)), '')

FROM (

SELECT '02yC' AS data UNION ALL

SELECT '12G8' UNION ALL

SELECT '9Pp1' UNION ALL

SELECT '7@uL' UNION ALL

SELECT '' UNION ALL

SELECT 'a' UNION ALL

SELECT 'b2' UNION ALL

SELECT 'c34' UNION ALL

SELECT 'd456' UNION ALL

SELECT 'e5678'

) AS test_data