It sounds like OTHERWISE is vaguely analogous to a catch on Java's ClassCastException (assuming it would be thrown for any nonsensical comparison). Traditonal if/else maps IF to true and ELSE to false|undefined; OTHERWISE simply extracts the undefined case to a separate clause.
Interesting way of expressing the result of an ill-defined operation. Or am I off base?
No, you're exactly right. If you think about it, both of these things are (almost) exactly equivalent. In both cases you are separating out a third control branch. The only difference is the syntax you use to specify what happens on that third branch, and whether or not that branch is taken immediately when the non-true-non-false value is generated. It is exactly the difference between (say)dividing by zero throwing an exception or returning an infinity or a NaN.
Exceptions are very much well-defined results. They just aren't the result you were originally expecting. But the meaning of a program is defined in terms of the language's own semantics, not what the programmer expects.
Interesting way of expressing the result of an ill-defined operation. Or am I off base?