The null reference can always be cast to any reference type (according to JLS3).
That makes it legal to pass the null refrerence as an argument to the method x.
The other question is - of the two overloaded methods, why is method B chosen?
When more than one applicable method is available, Java chooses the most specific method.
If more than one member method is both accessible and applicable to a method invocation, it is necessary to choose one to provide the descriptor for the run-time method dispatch. The Java programming language uses the rule that the most specific method is chosen.
The informal intuition is that one method is more specific than another if any invocation handled by the first method could be passed on to the other one without a compile-time type error.
So in your example, invocation of method x(B b) could also be handled by method x(A a) (B is a subtype of A, so it can be upcast to A) .
On the other hand, invocation of method x(A a) cannot be handled by method x(B b) (you cannot pass instance of A to a method that expects it subtype, B. Imagine passing an instance of Object to a method that takes a String - not legal).
That makes method x(B b) the more specific of the two.