A & B is an intersection type. An object of this type can act as both an A and as a B.
This particular intersection type also happens to be a "functional interface" type, which means that it only has 1 abstract method. This lets you instantiate an object of this type using a lambda-expression. A & B is a "functional interface" type because both A and B have the foo-method with the exact same type signature.
So that is what this code means. You are instantiating an object of type A & B, implementing the foo-method with the lambda-function.
(A & B) () -> {
System.out.println("1");
System.out.println("2");
}
The System.out.println will just print out this lambda object using it's toString-method. Note that it will not call the actual foo-method. Your code will therefore just print out something similar to this: Main$$Lambda$1/1642360923@1376c05c