Carets introduce a difficult situation since they are essentially
"lossy" when parses. Consider this in cmd.exe:

    > echo "foo^bar"
    "foo^bar"
    > echo foo^^bar
    foo^bar

The two commands produce different results, but are both parsed by the
shell as `foo^bar`, and there's essentially no sensible way to tell what
was actually passed in. This implementation assumes the quoted variation
(the first) since it is easier to implement, and arguably the more common
case.