NUL is a special 'file' in the file system (same as LPT1, COM1, CON if you remember back to the DOS days). It's the nul device, the trash bin, the black hole of the file system.
Anything written to nul is discarded. Hence you're not writing the backup file anywhere, it's much the same as backing the database up to a file, then deleting the file (except the file is never written in the first place)
It's not NULL, because NULL is a SQL Server keyword, not a file system concept.
May help - http://sqlinthewild.co.za/index.php/2009/08/31/backing-up-to-nul-vs-backup-with-truncate-only/
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