ActionScript is a derivative of JavaScript. In both languages, all variables declaration are hoisted to the top of the containing function and are accessible throughout the function, regardless of which block scope they were declared in.
Memory is reclaimed when all the references to the object are no longer accessible to the program. Since you're adding aTile to nVector and to the Sprite, it will only be reclaimed after the function returns, nVector goes out of scope, and Spr goes out of scope and is removed from the stage.