SQL Server 2012 :: Case Statement On Nvarchar With Literal String Comparison To Varchar?

how SQL 2012 would treat a literal string for a comparison similar to below. I want to ensure that the server isn't implicitly converting the value as it runs the SQL, so I'd rather change the data type in one of my tables, as unicode isn't required.

Declare @T Table (S varchar(2))
Declare @S nvarchar(255)
Insert into @T
Values ('AR'), ('AT'), ('AW')
Set @S = 'Auto Repairs'
Select *
from @T T
where case @S when 'Auto Repairs' then 'AR'
when 'Auto Target' then 'AT'
when 'Auto Wash' then 'AW' end = T.STo summarise

in the above would AR, AT and AW in the case statement be treated as a nvarchar, as that's the field the case is wrapped around, or would it be treated as a varchar, as that's what I'm comparing it to.