I say split everything up, start with the value, and work backwards from there, each time through, wrapping what you have inside another array. Like so:
$s = 'config.debug.router.strictMode = true';
list($parts, $value) = explode(' = ', $s);
$parts = explode('.', $parts);
$value = array(array_pop($parts) => $value);
Definitely rewrite it so it has error checking.