Yes and no, I mean "out" is giving back a fresh variable to its caller.
The state before should be considered undefined, it can exist, can have values, can be nil.
I would say that in the 1. line inside the method, this does not exist, since the out parameter shall give back a new parameter.
Whatever it was before shall not matter.
From my opinion this is what "out" should originally stands for, even if it maybe can be misused somehow.
On the other side, "var" brings in an existing parameter, inside the method, which can be used or changed at will.