The line int& i = j, j; declares two variables i and j. (If this is surprising, remember that you can declare multiple variables at once, e.g. int i, j, k;. i here just happens to have an initializer.)

So this program has two variables named j. The first is the global one, the second is local to main. Which one is used to initialize i in the expression int& i = j?

When initializing i with the expression j, we need to do name lookup for j. If the local j is in scope at that point in the program, it will be used, otherwise, the global j will be used.

§[basic.scope.pdecl]¶1:

The locus of a declaration (§[basic.pre]) that is a declarator is immediately after the complete declarator (§[dcl.decl]).

So the locus of the local j is here:

int& i = j, j;
            /\

And §[basic.lookup.general]¶2 says:

A program point P is said to follow any declaration in the same translation unit whose locus (§[basic.scope.pdecl]) is before P.

The locus of the local j is after the program point P where the reference i is bound, so P does not follow the declaration of the local j.

This means that name lookup for j in the expression int& i = j does not find the local j, but rather the global j, and i is bound to the global j.

However, the program point where we set j = 2 does follow the locus of the local j, so we modify the local j, and the j that i refers to is not affected.