Let's see the difference with and without optimization in code:
procedure test;
var
  x,y,z: integer;
begin
  x:= 1;   //x is stored in register EAX.
  Inc(x);  
  y:= x;   //this is a no-op because it's just a rename.
//After this point x is no longer used.
//Here you will get `Variable x inaccessible here due to optimization`
  z:= 0;   //z is never used 
  if (y = 1) then Inc(z);  //because Delphi knows this code will never execute
end;
Here's the assembly code with optimization:
Project5.dpr.12: x:= 1;   //x is stored in register EAX.
004085E8 B801000000       mov eax,$00000001
Project5.dpr.13: Inc(x);  
004085ED 40               inc eax
Project5.dpr.18: if (y = 1) then Inc(z);
004085EE 48               dec eax  //test to see if eax=1, triggers `jz` if true.
                                   //Delphi put it in to facilitate the `if`, but
                                   //is not smart enough to eliminate it :-)
Project5.dpr.19: end;
004085EF C3               ret 
And here's the code without optimization:
Project5.dpr.11: begin    //note that Delphi doesn't use registers, but the stack 
                          //to keep variables.
004085E8 55               push ebp
004085E9 8BEC             mov ebp,esp      //init the stack frame.
004085EB 83C4F4           add esp,-$0c
Project5.dpr.12: x:= 1;   //x is stored near the top of the stack.
004085EE C745FC01000000   mov [ebp-$04],$00000001
Project5.dpr.13: Inc(x);  
004085F5 FF45FC           inc dword ptr [ebp-$04]
Project5.dpr.14: y:= x;   //y sits on the stack frame.
004085F8 8B45FC           mov eax,[ebp-$04]
004085FB 8945F8           mov [ebp-$08],eax
Project5.dpr.17: z:= 0;    //z is also in the stack frame.
004085FE 33C0             xor eax,eax
00408600 8945F4           mov [ebp-$0c],eax
Project5.dpr.18: if (y = 1) then Inc(z);
00408603 837DF801         cmp dword ptr [ebp-$08],$01
00408607 7503             jnz $0040860c
00408609 FF45F4           inc dword ptr [ebp-$0c]
Project5.dpr.19: end;     //all vars stay in scope.
0040860C 8BE5             mov esp,ebp  //until the stack frame is dismantled.
0040860E 5D               pop ebp  
0040860F C3               ret 
So your situation should never occur with optimization off, but...
You can set optimization on/off in the source code too:
{$Optimization on/off}  or
{$O+/-}
If that line is in front of your routine it will override the global setting.
http://docwiki.embarcadero.com/RADStudio/en/Optimization_%28Delphi%29