I think that compiler wants to prevent us - the first statement is useless - we do not do anything with int - just declaring, but when we add curly braces the situation is different. We have THE SCOPE of an int in which that variable can be used, so compier doesn't give any error.
Short answer.... it is simply defined that way. The JLS defines the body of a ForStatement as having a Statement. A LocalVariableDeclaration is *not* one of the options of Statement, hence, illegal for the first case. In the second case, a BlockStatement is an option for Statement, and a BlockStatement is defined to contain LocalVariableDeclarations, hence, legal.