This only works if the numbers are in a known range (say sequential from 1 to 100), and you XOR in the index (plus 1) as well. Then each number is XOR'd two times, except the duplicate, which is XOR'd 3 times (and thus remains at the end). The fact that the code is wrong shows why this question is a very bad interview question.

EDIT

The given code works to find the only non-duplicate item in a list (perhaps that was what was intended)