Reading from a port

Hi,

I have just started learning embedded programming on my own. The book I am using (Embedded C Book by Micheal Pont) says:
"because of the underlying hardware, we can only read from a pin if the
corresponding latch contains a '1'."
This line is confusing me as I have been able to read values of the port without initializing it first.
This is my code:

#include <reg52.h>
sbit pin = P2 ^ 1;
void main(void)
{ P2 = 0; while(1) { pin ^= 1; }
}

Debugging shows that it is working just as anticipated. Can someone please explain what's going on here? I am using the Keil C51 simulator (device selected is 8052), could that be the problem?

Thanks in advance.

Aaron