Unexpected ruby behaviour

baffling.rb

# found with ruby 2.2.2 (but I think it must have worked on 1.9, too.

def meth(arg)
  argument.is_a?(String) ? 'a' : 'b'
end 

meth('foo')
# NameError: undefined local variable or method `argument' for main:Object
# This is completely expected, I've never defined `argument`.

def meth(arg)
  argument = argument.is_a?(String) ? 'a' : 'b'
end 

meth('foo')
# 'b'
# WAT!


# It appears that the equals operator defines a local variable, presumably a nil, before executing the if block.

Additional information

a.class
# NameError: undefined local variable or method `a' for main:Object
b = b.class
# => NilClass

The presence of argument = means Ruby allocates a local variable before executing the method body, so the argument in the right-hand side evals to nil rather than raising an unknown name error.