When you have a question about something built into .NET, the place to check is MSDN. Here's the relevant documentation for the Mode property.
Here's what is says about transform.
Unsupported markup-language elements are removed from the contents of
the control. If the Literal control is rendered on a browser that
supports HTML or XHTML, the control's contents are not modified.
Also
If you specify Transform, the rendering behavior of the Text property
depends on the type of markup being rendered. When the Literal control
is rendered for a device or browser that supports HTML or XHTML,
specifying Transform produces the same behavior as specifying
PassThrough. All markup tags and elements for the Text property are
rendered for the requesting browser.