Let us first solve a simple subtask : Given a set A of n integers and you have listed all the subsets of it
Consider A = \{ 1,2 \} Now P(A) = \{ \phi, \{1\},\{2\},\{1,2\}\}
If we add a element 3 to our current set then, A = \{ 1,2,3 \} and P(A) = \{ \phi, \{1\},\{2\},\{3\},\{1,2\},\{1,3\},\{2,3\},\{1,2,3\}\}
While adding the element 3 we have 2 choices, either we add it to the existing subset or we leave the existing subset as it is
For example, \{1\} will results in 2 subsets, \{1\} and \{1,3\} and similarly for the other subsets
Now considering the original problem, main observation is that XOR value of the subset will be always between 0 to 1023
Let the DP state be (i,j), in which we have considered all the subsets of A[1..i] and j is the possible XOR value
if DP[i][j] is true, the one of the subset of A[1..i] will gives the XOR value j, false otherwise
Now consider the DP[i][j], in this we are considering all subsets of A[1..i], so let us consider the i^{th} element i.e. A_i
If we not consider this element then sub-problem reduces to DP[i-1][j], else if we consider this element then one of the subsets of A[i..i-1] must be XORed to j \oplus A_i , because j \oplus A_i \oplus A_i = j
Thus we can say that DP[i][j] = DP[i-1][j] \hspace{1 mm} \vert \hspace{1 mm}DP[i-1][j \oplus A_i]
I hope you get the idea