Why does the Delphi compiler think that the value of a local boolean variable is initialized when it obviously is not?

Question

Documentation: 1, 2:

USE_BEFORE_DEF W1036
W1036 Variable '%s' might not have been initialized (Delphi)
This warning is given if a variable has not been assigned a value on every code path leading to a point where it is used.

I have the following code in an empty form:

{$WARN USE_BEFORE_DEF ERROR}
procedure TForm1.FormMouseMove(Sender: TObject; Shift: TShiftState; X, Y: Integer);
var
  lHandled: Boolean;
begin
  // Using this block shows no warnings no errors!
  if False then
    OnMouseWheelUp(Self, [], Point(0,0), lHandled);

  // Using this block shows the E1036 error (as expected)!
  //if False then
  //  lHandled := True;

  if lHandled then
    Memo1.Lines.Add('Handled = true') // depending on the chance, one of these branches will be chosen
  else
    Memo1.Lines.Add('Handled = false'); // depending on the chance, one of these branches will be chosen
end;

Obviously, lHandled can have no value assigned (since there is no else branch). However, even despite the {$WARN USE_BEFORE_DEF ERROR} the code is assembled without any warnings or errors. Why doesn't the compiler see that the variable is potentially not initialized? Is it a bug or a known "feature"?

Answer 1

Delphi's warning in regard to variable initialization has been unreliable (or even non existant?) for a long while when passing said variable by reference (including as const [ref]) to another function.

You don't even need a branch to break it. This still won't give a warning (as of Delphi 11.3) while it definitely should :

procedure TForm1.FormCreate(Sender: TObject);
var obj : TObject;
begin
  Obj.Free;
  FreeAndNil(Obj);
end;

But this will

procedure TForm1.FormCreate(Sender: TObject);
var obj : TObject;
begin
  Obj.Free;
end;

So yeah, I'd call it bugged.