Where does ASP.NET virtual path resolve the tilde “~”?

It gets it from here:

VirtualPathUtility.ToAbsolute(contentPath, httpContext.Request.ApplicationPath);

Here is the reflector output for PathHelpers class in System.Web.Mvc DLL:

private static string GenerateClientUrlInternal(HttpContextBase httpContext, string contentPath)
{
    if (string.IsNullOrEmpty(contentPath))
    {
        return contentPath;
    }
    if (contentPath[0] == '~')
    {
        string virtualPath = VirtualPathUtility.ToAbsolute(contentPath, httpContext.Request.ApplicationPath);
        string str2 = httpContext.Response.ApplyAppPathModifier(virtualPath);
        return GenerateClientUrlInternal(httpContext, str2);
    }
    NameValueCollection serverVariables = httpContext.Request.ServerVariables;
    if ((serverVariables == null) || (serverVariables["HTTP_X_ORIGINAL_URL"] == null))
    {
        return contentPath;
    }
    string relativePath = MakeRelative(httpContext.Request.Path, contentPath);
    return MakeAbsolute(httpContext.Request.RawUrl, relativePath);
}