>'true' and 'false' are literal values for bit but it only works when comparing to bit

The real shortcoming of bit values in TSQL is that you can't use them in expressions unless a part of comparison, i.e.

when a and b then 100 else when a and not b then 50 ...

doesn't work, a and b, bit fields, are not recognised as boolean values in a logical expression, you have to put it as

when a=1 and b=1 then 100 else when a=1 and  b=0 then 50 ...