How can the taskListItem hold their binding outside the function scope?

I'm not 100% sure that I'll be able to explain this clearly, but I'll do my best.

It might be easier to think of it in terms of the DOM element that gets created. Let's take a look at an abbreviated version of the code using just the edit button:

var bindTaskEvents = function(taskListItem, checkBoxEventHandler) {  
  var editButton = taskListItem.querySelector("button.edit"); // edit button
  editButton.onclick = editTask; // bind to editTask function
}

You end up with an edit button that has the onclick event bound to the editTask() function. So the DOM element could look like:

<button class="edit" onchange="editTask()">Edit</button>

So it's not so much that they're being called out of scope. They're associated with the element.

It's not a perfect example, but say you changed the CSS of the element instead:

var bindTaskEvents = function(taskListItem, checkBoxEventHandler) {  
  var editButton = taskListItem.querySelector("button.edit"); // edit button
  editButton.style.background = blue; // change the background to blue
}

Those styles would still apply even outside the scope of that function, right? It's similar.

If it would help, you can actually look at the DOM properties of an element using the web inspector in most browsers. In Firefox for example, you can right click on an element on the page and do Inspect Element. Then right click on the corresponding HTML and click Show DOM Properties. You can then view all of the properties for that element, including onclick.

Hopefully that makes sense, but let me know if you have any questions.

In answer to your other question, yes you can have for loops outside of a function.

// For each list item in the completed items <ul>, taskIncomplete().
for(var i = 0; i < completeTaskHolder.children.length; i++) {
  bindTaskEvents(completeTaskHolder.children[i], taskIncomplete);
}

This is run when the script is originally referenced in the HTML, so we can bind all of the elements that already exist on the page.

Happy coding!