The union and intersection are exactly like they are in Set theory in Maths.
This is an union : The population is com from both sets are taken up excluding duplicates or common records.
In campaign if you have 2 incoming population , it will combine them and provide the combined populated minus the duplicates in both the population keeping only one record.
This is an intersection : Only the common population from two sets are kept. . So in campaign if you have two incoming queries , it will only keep the common population among the two based on the conditions you provide.
Usage of these two will be determined by your use case. If you want to target on a common attribute use interaction , if you want to combine populations use union