public void foo() {
    C c = new C();
    bar(c.baz); // assume that baz does not reference c
  }

I was under the impression that HotSpot would not garbage collect c before the local variable went out of scope although it is legally allowed to do so. I even heard of issues where unnecessary garbage was retained as a result (usual workarounds are to null the variable or to inline it).

According to this bug report (Server JIT optimization can cause objects to go out of scope prematurely), the Server VM is actually able to GC the object before the local variable goes out of scope. It would be interesting to know if it can detect such cases reliably.