It is not valid Verilog code. It is SystemVerilog code.
The `" sequence turns into an ordinary quote after arguments have been
substituted (and presumably nested macros expanded, as this case
requires). If ordinary quotes were used, this would be a string
literal, and macro arguments and macro invocations would not be
recognized as such inside of it. This gives the same capability as
the C language macro "stringizing" operator, letting macros build
strings from pieces that include arguments.
The `\`" sequence turns into a \" in the resulting expansion. Inside
a string literal, that \" sequence means that there is a literal "
character inside the string.
The other SV macro extension is ``, which acts as a token delimiter
when looking for macro arguments, but is then discarded. This allows
you to connect the expansion of a macro argument to an identifier
without any spaces between them, building a larger identifier. This
gives the
same capability as the C language macro "token pasting" operator,
letting macros build identifiers from pieces that include arguments.