We have created two variable bindings, with the second one (b) pointing at the address for a. The b variable doesn't contain the value of the a variable, but it points to the position a is held at, from which it can obtain a value (in other words, the value of b is borrowed from a).
In terms of our stack diagram, we have this:
The i binding points to address 0 and the b variable points to address 0, and this is the parameter being passed to second.
We can use this stack method to think about memory for a complex situation if you like.