If no handler had been set, the return from the first call to signal would be SIG_DFL and the call to signal to reset the handler would just set it back to its default.

Here is just the for loop:

for ( ; ; ) {
    if ( (n = Recv(sockfd, recvline, MAXLINE, MSG_PEEK)) == 0)
        break;      /* server closed connection */

    Ioctl(sockfd, FIONREAD, &npend);
    printf("%d bytes from PEEK, %d bytes pending\n", n, npend);

    n = Read(sockfd, recvline, MAXLINE);
    recvline[n] = 0;    /* null terminate */
    Fputs(recvline, stdout);
}

The data is still output because falling off the end of the main function is the same as returning from this function, and the main function is called by the C startup routine as follows:

exit(main(argc, argv));

Hence, exit is called, plus the standard I/O cleanup routine is called.