Yes, THX @Grumpy_Mike for breaking this down.
Many times you will see that written like this
ADMUX &= ~B111; // clear out the channel select bits
which does the same and avoids a possible problem when variable lengths are different numbers of bits. No problem with either expression in this case.
And the belt and suspenders crowd might write the above as
ADMUX |= (chn &0x7); // set the channel select
so chn can influence only the three bits it should. I guess the B&S ppl might even range check chn instead of crudely chopping it down to size…
a7