Is null evaluated to 0 and undefined to NaN on arithmetic expressions? Is it safe or correct to assume this?

Yes, it is. An "arithmetic expression" would use the ToNumber operation:

 Argument Type | Result
 --------------+--------
 Undefined     | NaN
 Null          | +0
 …             |

It is used in the following "arithmetic" expressions:

• prefix/postfix increment and decrement
• the unary + and - operators
• the + operator if none of the two arguments is a string
• subtraction, multiplication, division and modulo operation
• relational operators if not both arguments are strings

It is not used by the equality operators, so null == 0 is false (and null !== 0 anyway)!

I believe the code is trying to ask, "is x numeric?" with the specific case here of x = null. The function isNaN() can be used to answer this question, but semantically it's referring specifically to the value NaN. From Wikipedia for NaN:

NaN (Not a Number) is a value of the numeric data type representing an undefined or unrepresentable value, especially in floating-point calculations.

In most cases we think the answer to "is null numeric?" should be no. However, isNaN(null) == false is semantically correct, because null is not NaN.

Here's the algorithmic explanation:

The function isNaN(x) attempts to convert the passed parameter to a number¹ (equivalent to Number(x)) and then tests if the value is NaN. If the parameter can't be converted to a number, Number(x) will return NaN². Therefore, if the conversion of parameter x to a number results in NaN, it returns true; otherwise, it returns false.

So in the specific case x = null, null is converted to the number 0, (try evaluating Number(null) and see that it returns 0,) and isNaN(0) returns false. A string that is only digits can be converted to a number and isNaN also returns false. A string (e.g. 'abcd') that cannot be converted to a number will cause isNaN('abcd') to return true, specifically because Number('abcd') returns NaN.

In addition to these apparent edge cases are the standard numerical reasons for returning NaN like 0/0.

As for the seemingly inconsistent tests for equality shown in the question, the behavior of NaN is specified such that any comparison x == NaN is false, regardless of the other operand, including NaN itself¹.