You're conflating null and zero (which C encourages you to do for various terrible reasons). The test does not test that x is not zero; it tests that x is not null (null, like zero, is falsey, but again, null is not to be mistaken for zero), which in C is sometimes represented by the character '0' but which legally can be totally distinct from the bit-pattern zero and which should be thought of as totally distinct. Zero can be a valid address in memory. Null is never a valid address in memory. The integral type with value zero when cast to a pointer is guaranteed to be the null pointer (which may have a different bit pattern than zero!). Casting non-integral types that happen to have the value zero to a pointer is not guaranteed to produce a null pointer. Confused yet?

The compiler isn't. It knows that you're testing that a pointer is not null.

Since x has already been derefrenced, and since derefrencing x has no translatable meaning if x is null, it follows that we can only produce a meaningful translation of this program iff x is not null.

It therefore follows that x must not be null in the test, since x has not changed.