Some lambda conversions involving intersection types are still failing as announced here:

http://mail.openjdk.java.net/pipermail/compiler-dev/2020-December/015942.html

Below is another example using a lambda expression directly instead of a method reference (and without records):

public class LCE3 {
    interface I { }
    interface F<T extends I> {
        void call(T t);
    }

    static abstract class C { }
    static class A extends C implements I { }
    static class B extends C implements I { }
    static class Pair<P extends I> {
        P p1; P p2;

        static <P extends I> Pair<P> of(P p1, P p2) {
            var that = new Pair<P>();
            that.p1 = p1; that.p2 = p2;
            return that;
        }

        void forEach(F<P> f) {
            f.call(p1);
            f.call(p2);
        }
    }

    public static void main(String[] args) {
        var pair = Pair.of(new A(), new B());
        pair.forEach((i) -> System.out.println(i.getClass()));
    }
}

$ java -version
openjdk version "16-ea" 2021-03-16
OpenJDK Runtime Environment (build 16-ea+31-2150)
OpenJDK 64-Bit Server VM (build 16-ea+31-2150, mixed mode, sharing)
$ javac LCE3.java
$ java LCE3
Exception in thread "main" java.lang.BootstrapMethodError: bootstrap method initialization exception
at java.base/java.lang.invoke.BootstrapMethodInvoker.invoke(BootstrapMethodInvoker.java:185)
at java.base/java.lang.invoke.CallSite.makeSite(CallSite.java:315)
at java.base/java.lang.invoke.MethodHandleNatives.linkCallSiteImpl(MethodHandleNatives.java:281)
at java.base/java.lang.invoke.MethodHandleNatives.linkCallSite(MethodHandleNatives.java:271)
at LCE3.main(LCE3.java:27)
Caused by: java.lang.invoke.LambdaConversionException: Type mismatch for instantiated parameter 0: class LCE3$C is not a subtype of interface LCE3$I
at java.base/java.lang.invoke.AbstractValidatingLambdaMetafactory.checkDescriptor(AbstractValidatingLambdaMetafactory.java:322)
at java.base/java.lang.invoke.AbstractValidatingLambdaMetafactory.validateMetafactoryArgs(AbstractValidatingLambdaMetafactory.java:308)
at java.base/java.lang.invoke.LambdaMetafactory.metafactory(LambdaMetafactory.java:327)
at java.base/java.lang.invoke.BootstrapMethodInvoker.invoke(BootstrapMethodInvoker.java:127)
... 4 more