Unreachable statement compile error in Java [duplicate]

Does it mean that compiler checks whether it is able to compile for all branches/lines of code ?

It means the compiler checks that every statement is reachable.

From section 14.21 of the JLS:

It is a compile-time error if a statement cannot be executed because it is unreachable.

This section is devoted to a precise explanation of the word "reachable." The idea is that there must be some possible execution path from the beginning of the constructor, method, instance initializer, or static initializer that contains the statement to the statement itself. The analysis takes into account the structure of statements.

The section then documents how reachability is defined.

In particular, the relevant points in your case are:

Every other statement S in a non-empty block that is not a switch block is reachable iff the statement preceding S can complete normally.

A break, continue, return, or throw statement cannot complete normally.

So your "line 1" statement is preceded by a statement (break;) which cannot complete normally, and therefore it's unreachable.

The compiler is also able to make that conclusion, and assumes you are making a mistake. And yes, the Java compiler does a pretty good amount of "Data-Flow Analysis". The most common related message is the one about variables not initialized. The second most frequent is, I believe, precisely this one, about code not reachable.