// ready is passing in a function to foo, so the function code is displayed. arg should be null. This is the expected behavior and is neccessary if foo is a shared function.

That's correct. We added this such that you could call jQuery by any name within your program scope. For example:

  jQuery(document).ready($){
    $("div").hide();
  });

or:

  jQuery(function($){
    $("div").hide();
  });

So, yes, it doesn't behave like a normal event (in that it doesn't pass in an Event Object), but this event also isn't a normal event. In this case, we're taking advantage of that fact by providing an incredibly useful feature, for users who work in conflicting-code situations.