For the uninitiated this looks completely barbaric, but makes a whole lot of sense when you consider that PS is built around an object-based pipeline. 'Select-String' in PS doesn't actually return a string, but a 'MatchInfo' object, which contains more properties -- 'linenumber', 'context', etc, as well as the 'line' property which contains the actual matched lines as strings. The default output from any part of the pipeline is a human-readable/terminal-display-compatible representation of the object's commonly used properties, thus the truncation.
As an aside, you can replace the foreach with select-object for an efficiency gain:
sls "Pattern" file.txt | select -exp line | out-file t.txt