Such a matrix MUST be one that has a rotation component which leaves any vector perpendicular to {{XRRay/direction}} and the Z axis unchanged.

I'm pretty sure I get what you're trying to say here, but this was a bit confusing to me. Perhaps just because 3D math isn't my bread-and-butter. Would it be simpler to refer to the cross product?

The cross product has no direction when the vectors are parallel, so I'd have to have an extra bit of text saying that the rotation is zero in such a case. This phrasing conveniently avoids this problem since when dir and Z are parallel, there are infinite perpendicular vectors, and keeping them all unchanged implies rotation=0.