Tar doesn't do compression. And the command line I gave is sending the tar "file" to standard out, which is just piped to the other tar that is "opening it" in the new location. So there is no intermediate tar file created. It's just piped from one tar to the other tar. The end result is the whole directory tree is copied without needing an intermediate file.
And on most implementations of tar, the dash is optional before the switches. I just checked on one of my Linux systems and the dash is not needed.
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