What is happening here is something known as currying - transforming a function which takes n multiple arguments in such a way that it can be called as a chain of functions
Let us consider a function f which takes 2 arguments, i.e. f(x,y). There exists a unary function g such that f(x,y) = g(x)(y) =(g(x))(y). The function g is known as the curried version of f.
g is a function which expects one argument, (x) and the value of g(x) is also a function of one argument, y.
Let us consider a curried-add function:
(define curried-add
(lambda (x)
(lambda (y) (+ x y))))
((curried-add 1) 5)
The call to (curried-add 1) would return a function which takes one argument, in our case 5 and adds it to 1, giving and output of 6.
We can chain these curried-adds together to get:
((curried-add ((curried-add 1) 2)) 3)
Would produce an output of 6. This is because (curried-add 1) would return a function expecting one argument, in this case 2. Therefore 1 is added to 2 and produces a function which is expecting one argument which can be added to the 3 we've just made.
In this case of your true and false functions.
True is : (define t (lambda (x) (lambda (y) x)))
False is: (define f (lambda (x) (lambda (y) y)))
The true function takes two arguments and returns the first one, the false function returns the second of the two arguments.