Not sure what else you need, other than what's already there in the decompiled version.
You can of course look up the TextureCaps
flag bits in the d3d headers, to make some more sense of that. I believe this is correct:
if (!(TextureCaps & D3DPTEXTURECAPS_POW2) || (TextureCaps & D3DPTEXTURECAPS_NONPOW2CONDITIONAL))
As such, it's testing to see whether non-power-of-two textures are unconditionally supported or not (the condition evaluates to true
if they are not supported).
See also the relevant msdn page.