Firstly, the comment is wrong. That doesn't truncate the log. The TruncateOnly option is only valid for data files, it's ignored when shrinking log files. All that statement does is attempt to shrink the log file to 0 MB. It won't be able to shrink anything if the active portion of the log is at the end of the file, as nothing ever moves log records around.

Secondly, why are you shrinking the log every night? That's just a waste of resources and will result in slower transactions the next day as the log regrows.

Shrinking the log should be a very exceptional operation, done only when some non-standard operation has grown the log well above what it needs to be for regular activity.

http://www.sqlservercentral.com/articles/Administration/64582/