FULL PRODUCT VERSION :
java version "1.8.0_20"
Java(TM) SE Runtime Environment (build 1.8.0_20-b26)
Java HotSpot(TM) 64-Bit Server VM (build 25.20-b23, mixed mode)

ADDITIONAL OS VERSION INFORMATION :
Darwin user.local 13.3.0 Darwin Kernel Version 13.3.0: Tue Jun 3 21:27:35 PDT 2014; root:xnu-2422.110.17~1/RELEASE_X86_64 x86_64

A DESCRIPTION OF THE PROBLEM :
Given these functions:

public static <In extends Number, Out extends Number> Out test(In in, Function<In, Out> f) {
    Out x = f.apply(in);
    return test(in, x);
}

public static <In extends Number, Out extends Number> Out test(In in, Out out) {
    return out;
}

The following call should work Test.test(1, Integer::new), however the following error is reported:

Test.java:5: error: reference to test is ambiguous
    Test.test(2, Integer::new);
        ^
both method <In#1,Out#1>test(In#1,Function<In#1,Out#1>) in Test and method <In#2,Out#2>test(In#2,Out#2) in Test match
where In#1,Out#1,In#2,Out#2 are type-variables:
In#1 extends Number declared in method <In#1,Out#1>test(In#1,Function<In#1,Out#1>)
Out#1 extends Number declared in method <In#1,Out#1>test(In#1,Function<In#1,Out#1>)
In#2 extends Number declared in method <In#2,Out#2>test(In#2,Out#2)
Out#2 extends Number declared in method <In#2,Out#2>test(In#2,Out#2)

The following works though:

Test.test(2, new Function<Integer, Number>() {
    @Override
    public Number apply(Integer integer) {
       return 10;
    }
});

and

Test.test(2, (Function<Integer, Number>) integer -> 10);

Link to Stackoverflow question: http://stackoverflow.com/questions/25653204/java-8-functional-interface-ambiguous-reference-is-this-a-bug

STEPS TO FOLLOW TO REPRODUCE THE PROBLEM :
import java.util.function.Function;

public class Test {
  public static void main(String[] args) {
    Test.test(2, Integer::new);
  }

  public static <In extends Number, Out extends Number> Out test(In in, Function<In, Out> f) {
    Out x = f.apply(in);
    return test(in, x);
  }

  public static <In extends Number, Out extends Number> Out test(In in, Out out) {
    return out;
  }
}

EXPECTED VERSUS ACTUAL BEHAVIOR :
EXPECTED -
Successful compilation
ACTUAL -
Failed compilation

ERROR MESSAGES/STACK TRACES THAT OCCUR :
Test.java:5: error: reference to test is ambiguous
    Test.test(2, Integer::new);
        ^
both method <In#1,Out#1>test(In#1,Function<In#1,Out#1>) in Test and method <In#2,Out#2>test(In#2,Out#2) in Test match
where In#1,Out#1,In#2,Out#2 are type-variables:
In#1 extends Number declared in method <In#1,Out#1>test(In#1,Function<In#1,Out#1>)
Out#1 extends Number declared in method <In#1,Out#1>test(In#1,Function<In#1,Out#1>)
In#2 extends Number declared in method <In#2,Out#2>test(In#2,Out#2)
Out#2 extends Number declared in method <In#2,Out#2>test(In#2,Out#2)

REPRODUCIBILITY :
This bug can be reproduced always.

---------- BEGIN SOURCE ----------
import java.util.function.Function;

public class Test {
  public static void main(String[] args) {
    Test.test(2, Integer::new);
  }

  public static <In extends Number, Out extends Number> Out test(In in, Function<In, Out> f) {
    Out x = f.apply(in);
    return test(in, x);
  }

  public static <In extends Number, Out extends Number> Out test(In in, Out out) {
    return out;
  }
}
---------- END SOURCE ----------