It's in the computability theory sense, since compilers and language specifications are symbolic math-heavy, and in math you model all these things as recursive functions, the terminology is applied uniformly.

He means the general concept of recursion, of which looping is an implementation, so to speak.

What does 'UB' stand for?

Undefined Behavior.

Undefined Behavior

How does LLVM decide this loop is unbounded? Is any `while(true)` loop considered UB and therefore replaced with `return true` or is there more advanced introspection of the ast (some limited set of the halting problem)?

It checks how the loop can be exited, assumes that the loop must exit and thus take the code path that exits it, and then applies optimizations to remove everything it doesn't need to find the result.

Which isn't quite right: the C++ spec allows the compiler to assume that a loop without side-effects will terminate. And the only way the loop terminates will be by returning true.