Nephi was a powerful prophet, a righteous man who had performed unprecedented miracles in Jesus’s name (3 Ne. 7:18–20). Of course Jesus knew him. Like the Gospel of John, this account is in the third person, probably for reasons of authorial modesty, even though Mormon has clearly said he is taking his material from Nephi’s account (3 Ne. 5:9–10).
What is important, aside from the supreme moment of the Savior’s recognition of a faithful servant, are the historical details. Nephi was in Bountiful, not Zarahemla, even though that was his ancestral home and the location from which his father preached from his garden tower by the road leading to the principal market (Hel. 7:10). There is no reason to believe that Nephi would have abandoned that home before Zarahemla was burned at the Savior’s death.
One possible explanation is that (assuming the Messiah appeared soon after the destruction) Nephi had been on a missionary journey and happened to be in Bountiful. If, on the other hand, the Messiah had appeared nearly a year later (the reading I favor), then Nephi had survived Zarahemla’s burning, abandoned his home, and relocated to the new center of Bountiful. I prefer the second reading because I accept Mormon’s dating of this appearance as the end of the thirty-fourth year. (See commentary accompanying 3 Nephi 10:19–19.)