-O) and debug information (-g) which is fortunately possible in avr-gcc, the code watched in the debugger is optimized code. While it is not guaranteed, very often this code runs with the exact same optimizations as it would run without the -g switch.
This can have unwanted side effects. Since the compiler is free to reorder code execution as long as the semantics do not change, code is often rearranged in order to make it possible to use a single branch instruction for conditional operations. Branch instructions can only cover a short range for the target PC (-63 through +64 words from the current PC). If a branch instruction cannot be used directly, the compiler needs to work around it by combining a skip instruction together with a relative jump (rjmp) instruction, which will need one additional word of ROM.
Another side effect of optimization is that variable usage is restricted to the area of code where it is actually used. So if a variable was placed in a register at the beginning of some function, this same register can be re-used later on if the compiler notices that the first variable is no longer used inside that function, even though the variable is still in lexical scope. When trying to examine the variable in avr-gdb, the displayed result will then look garbled.
So in order to avoid these side effects, optimization can be turned off while debugging. However, some of these optimizations might also have the side effect of uncovering bugs that would otherwise not be obvious, so it must be noted that turning off optimization can easily change the bug pattern. In most cases, you are better off leaving optimizations enabled while debugging.