You are right that it should not compile, and on most compilers, it does not compile.
(Please specify exactly which compiler/version is NOT giving you a compiler error)
I can only hypothesize that the compiler knows the identities that (i | i) == i and (i & i) == i and is using those identities to optimize away the expression, just leaving behind the variable i.
This is just a guess, but it makes a lot of sense to me.