MIPS/GCC help

Why "beqz $a1, return", when $a1 is always nonzero? Is GCC retarded?

TEXT:800BFEC0                 lbu     $a2, 0($s0)
TEXT:800BFEC4                 addiu   $s0, 1
TEXT:800BFEC8                 lbu     $a1, 0($s0)
TEXT:800BFECC                 addiu   $s0, 1
TEXT:800BFED0                 andi    $v0, $a1, 0xC0
TEXT:800BFED4                 sll     $v0, 2
TEXT:800BFED8                 or      $a2, $v0
TEXT:800BFEDC                 andi    $a1, 0x3F
TEXT:800BFEE0                 addiu   $a1, 3
TEXT:800BFEE4                 beqz    $a1, return
TEXT:800BFEE8                 move    $a0, $zero

GCC is terrible!

What code was this compiled from?

>>3
No idea. It is a disassembly of Vandal Hearts executable.

The game uses some stupid LZ77 variation, where backref codes point into a 0x400 sliding window and unpacker copies every byte into both - output and this stupid window.