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In Shrek 2 Pinocchio is trying to avoid lying by using double negatives. He knows where Shrek is. He says "I don't know where he's not." This is actually a lie (though his nose doesn't grow). If he knew where Shrek was he would know everywhere Shrek isn't. You can't just randomly throw negatives into a sentence and expect it to be a double negative.
Edit: It was Shrek the Third, not Shrek 2.
I guess it depends on if the nose grows with untrue information, or lies.
Because if it's lies all he needs to do is THINK it's the truth and his nose won't grow.
If his nose grows because the information is not true, then this is one hell of a power. You could get him to theorise on the meaning of life.
The intent of the scene was clear. He's just trying to say a lot of double negatives and be confusing. It's not a moment of world building for the mechanics of Pinocchio's nose lol
Pinochio the philosophical scholar.
So I guess in that case part of the trick is confusing himself.
If he's not sure what he said, it's tough to rule it as a lie.
That would make an interesting story about a superhero with that power.