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Now, consider the addition of 'continue':
repeat ... if something then continue end ... local x = ... ... until something-with-x
We have two options: either the continue jumps into the scope of 'x' bypassing its declaration/initialization (very bad), or the continue skips the test altogether (very bad too).
So, it seems that continue is incompatible with this scope rule...
What would happen if someone wrote:
repeat
...
if not something then
local x = ...
end
...
until something-with-x