How can *i and u.i print different numbers in this code, even though i is defined as int *i = &u.i;? I can only assuming
Whether by accident or by design, C89 includes language which has been interpreted in two different ways (along with various interpretations in-between). At issue is the question of when a compiler should be required to recognize that storage used for one type might be accessed via pointers of another. In the example given in the C89 rationale, aliasing is considered between a global variable which is clearly not part of any union and a pointer to a different type, and nothing in the code would suggest that aliasing could occur.
One interpretation horribly cripples the language, while the other would restrict the use of certain optimizations to "non-conforming" modes. If those who didn't to have their preferred optimizations given second-class status had written C89 to unambiguously match their interpretation, those parts of the Standard would have been widely denounced and there would have been some sort of clear recognition of a non-broken dialect of C which would honor the non-crippling interpretation of the given rules.
Unfortunately, what has happened instead is since the rules clearly don't require compiler writers apply a crippling interpretation, most compiler writers have for years simply interpreted the rules in a fashion which retains the semantics that made C useful for systems programming; programmers didn't have any reason to complain that the Standard didn't mandate that compilers behave sensibly because from their perspective it seemed obvious to everyone that they should do so despite the sloppiness of the Standard. Meanwhile, however, some people insist that since the Standard has always allowed compilers to process a semantically-weakened subset of Ritchie's systems-programming language, there's no reason why a standard-conforming compiler should be expected to process anything else.
The sensible resolution for this issue would be to recognize that C is used for sufficiently varied purposes that there should be multiple compilation modes--one required mode would treat all accesses of everything whose address was taken as though they read and write the underlying storage directly, and would be compatible with code which expects any level of pointer-based type punning support. Another mode could be more restrictive than C11 except when code explicitly uses directives to indicate when and where storage that has been used as one type would need to be reinterpreted or recycled for use as another. Other modes would allow some optimizations but support some code that would break under stricter dialects; compilers without specific support for a particular dialect could substitute one with more defined aliasing behaviors.