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It does nothing to help with quoting, if $var is broken then so is x$var. About half the usages I've found (and this is some pretty old code) quote the variables correctly.

The assumption for this use was var was a valid single word but could conflict with switches to [ / test or it could be the empty string. If var was already guaranteed to be [^[:space:][:punct:][:cntrl:]]+, then x would also have been unnecessary too.

If we have set var='hello world' then the syntax breaks.

This is discussed in the article.

Not at all.

And even our autotools are still full of x-hacks without double quotes. He completely missed the point of the x-hack. Which obviously fails with spaces.