fix #32703, bad ambiguity error

caused by 5283847

src/subtype.c

@@ -3032,6 +3032,14 @@ static jl_value_t *intersect_types(jl_value_t *x, jl_value_t *y, int emptiness_o
     jl_stenv_t e;
     if (obviously_disjoint(x, y, 0))
         return jl_bottom_type;
+    if (jl_is_dispatch_tupletype(x) || jl_is_dispatch_tupletype(y)) {
+        if (jl_subtype(x, y))
+            return x;
+        else if (jl_subtype(y, x))
+            return y;
+        else
+            return jl_bottom_type;
+    }
     init_stenv(&e, NULL, 0);
     e.intersection = e.ignore_free = 1;
     e.emptiness_only = emptiness_only;

test/subtype.jl

@@ -1632,3 +1632,19 @@ end
 @testintersect(Tuple{Type{T} where T<:(S32488{Tuple{_A}, Int64, 1, _A} where _A), Tuple{Vararg{Int64, D}} where D},
                Tuple{Type{S32488{S, T, N, L}}, Tuple{Vararg{T, L}}} where L where N where T where S,
                Tuple{Type{S32488{Tuple{L},Int64,1,L}},Tuple{Vararg{Int64,L}}} where L)
+
+# issue #32703
+struct Str{C} <: AbstractString
+end
+struct CSE{X}
+end
+const UTF16CSE = CSE{1}
+const UTF16Str = Str{UTF16CSE}
+const ASCIIStr = Str{CSE{2}}
+c32703(::Type{<:Str{UTF16CSE}}, str::AbstractString) = 42
+c32703(::Type{<:Str{C}}, str::Str{C}) where {C<:CSE} = str
+
+@testintersect(Tuple{Type{UTF16Str},ASCIIStr},
+               Tuple{Type{<:Str{C}}, Str{C}} where {C<:CSE},
+               Union{})
+@test c32703(UTF16Str, ASCIIStr()) == 42