The optimizations he was talking about were things like writing in assembly or hand-unrolling loops. It was assumed that you’ve already picked an performant alg

The optimizations he was talking about were things like writing in assembly or hand-unrolling loops. It was assumed that you’ve already picked an performant algorithm / architecture and are writing in a performant low level language like C. Also, your digression about modern compilers is irrelevant to the context of the quote, since Knuth talked about premature optimization at a time when compilers were much simpler than today.