Why will "while true" use 100% of CPU resources?

If your CPU usage is not at 100%, then the process can use as much as it wants (up to 100%), until other processes are requesting the use of the resource. The process scheduler attempts to maximize CPU usage, and never leave a process starved of CPU time if there are no other processes that need it.

So your while loop will use 100% of available idle CPU resources, and will only begin to use less when other CPU intensive processes are started up. (if you're using Linux/Unix, you could observe this with top by starting up your while loop, then starting another CPU intensive process and watch the % CPU drop for the process with the loop).

In a multitasking OS the CPU time is split between execution flows (processes, threads) - that's true. So what happens here - the loop is being executed until some point when clock interruption occurs which is used by OS to schedule next execution "piece" from other process or thread. But as soon as your code doesn't reach specific points (input/output or other system calls which can switch the process into the "waiting" state, such as waiting for a synchronization objects sleep operations, etc.) the process keeps being in the "running" state which tells scheduler to keep it in the execution queue and reschedule its execution at the first best opportunity. If there are some "competitive" processes which keep their "running" state for long period of time as well the CPU usage will be shared between your and all these processes, otherwise your process execution will rescheduled immediately which will cause continuous high CPU consumption anyway.