In addition to schema it should be P1 no P2.

for (col = 0; col<4 ; col++);
{
P1 = P1 | col_xlat[col];
....
};

| means function or 1 or 0 = 0 and 1 or 1 = 1;
this with const table col_xlat do setting pin P2 to 0
on columns
step by step
0111, 1011, 1101, 1110.
So you can omit all rows.

you just set half of port P1 (P1.0 -P1.3)
and read all Port P1.

First all P1 is a input.
But when you write 0 this pin is set as output and
when you read it it get you 0 too.

You set 0 on pin P1.0 and 1 to other columns

P1 = P1 | col_xlat[col];

now you can check row lines bit P1.4,P1.5, P1.6, P1.7
is any row line is short by key to this 0 on P1.0.
Next you set P1.1 to 0 and other columns to 1.
Next you set P1.2 to 0 and other columns to 1.
Next you set P1.2 to 0 and other columns to 1.
it is all a combination set ot col_xlat and row_xlat