In the last issue of Heinz Kabutz's newsletter, #255 Java 10: Inferred Local Variables, it is shown that var is not a reserved word in Java 10, because you can also use var as an identifier:
public class Java10 {
var var = 42; // <-- this works
}
However, you cannot use i.e. assert as an identifier, as in var assert = 2, because assert is a reserved word.
As it's told in the linked newsletter, the fact that var is not a reserved word is good news, because this allows code from previous versions of Java that uses var as an identifier to compile without problems in Java 10.
So, what's var then? It's neither an explicit type nor a reserved word of the language, so it's allowed to be an identifier, however it does have a special meaning when used to declare a local variable in Java 10. What exactly do we call it in the context of a local variable declaration?
Additionally, apart from supporting backwards compatibility (by allowing older code that contains var as an identifier to compile), are there other advantages to var not being a reserved word?
According to JEP-286: Local-Variable Type Inference, var is
not a keyword; instead it is a reserved type name.
(Earlier versions of the JEP left room for implementing either as a reserved type name or as a context-sensitive keyword; the former path was ultimately chosen.)
Because it's not a "reserved keyword", it is possible to still use it in variable names (and package names), but not in class or interface names.
I would think the biggest reason for not making var a reserved keyword is backwards compatibility with old source code.