The AssertionError is a genuine bug, but the description and surmised reason are incorrect.
This is not a problem with an unrecognized @SuppressWarnings name (a valid @SuppressWarnings name will give the same AssertionError.) The problem is that the user has put the annotation in an inappropriate place -- inside a declaration in a statement. Currently, annotations are only permitted on packages, class declarations, method and field declarations.
However, the compiler should not crash given this invalid input, and the bug should remain open until that is addressed.