valac turns this Vala into the following C:

  private void foo (out string? bar)
    {
      string _bar = "baz qux";
     
      if (bar == "xyz")
        warning ("invalid string '%s'", bar);
    }

=>

static void folks_inspect_commands_signals_foo (FolksInspectCommandsSignals* self, gchar** bar) {
  gchar* _bar = NULL;
  gchar* _tmp0_;
  /* XXX: second declaration of _bar, for the local variable declared in Vala */
  gchar* _bar;
  g_return_if_fail (self != NULL);
  _tmp0_ = g_strdup ("baz qux");
  _bar = _tmp0_;
  if (g_strcmp0 (_bar, "xyz") == 0) {
    g_warning ("command-signals.vala:198: invalid string '%s'", _bar);
  }
  _g_free0 (_bar);
  if (bar) {
    *bar = _bar;
  } else {
    _g_free0 (_bar);
  }
}

==============================

The problem is that the out parameter "bar" creates a temporary variable "_bar" in C, which conflicts with the declaration of the local variable "_bar".