All characters in (or not in, for that matter) a string are just numbers. In c a string is stored as an array of 8-bit numbers with a 0 at the end to indicate the end of the string (the "null terminator"). Escape sequences are handled in precisely the same manner as regular characters: their ascii value is stored in an array. In your example, the following are identical:
"foo \x61 \042 baa"
"foo a \" baa"
{ 'f', 'o', 'o', ' ', '\x61', ' ', '\042', ' ', 'b', 'a', 'a', '\0'}
{ 'f', 'o', 'o', ' ', 'a', ' ', '"', ' ', 'b', 'a', 'a', '\0'}
{ 'f', 'o', 'o', ' ', 0x61, ' ', 042, ' ', 'b', 'a', 'a', '\0'}
{0x66, 0x6f, 0x6f, 0x20, 0x61, 0x20, 0x22, 0x20, 0x62, 0x61, 0x61, 0x0}
{ 102, 111, 111, 32, 97, 32, 34, 32, 98, 97, 97, 0}
{0146, 0157, 0157, 040, 0141, 040, 042, 040, 0142, 0141, 0141, 0}