Move check for binary mode and on_error option to the appropriate location.

Move check for binary mode and on_error option to the appropriate location.

Commit 9e2d870119 placed the check for binary mode and on_error
before default values were inserted, which was not ideal.
This commit moves the check to a more appropriate position
after default values are set.

Additionally, the comment incorrectly mentioned two checks before
inserting defaults, when there are actually three. This commit corrects
that comment.

Author: Atsushi Torikoshi
Reviewed-by: Fujii Masao
Discussion: https://postgr.es/m/8830518a-28ac-43a2-8a11-1676d9a3cdf8@oss.nttdata.com