Based on the following question, I found some odd behaviour of the c# compiler.
The following is valid C#:
static void K() {}
static void Main()
{
When you try to treat a delegate as a method, the compiler actually uses the delegate's Invoke() method. So, for example, the two lines below compile to the exact same IL (both call Invoke()):
k();
k.Invoke();
I assume the oddity you're seeing is a consequence of this. The delegate constructor expects a method (or rather, a method group), but it gets a delegate instead. So it treats it as a method and uses the Invoke() method.
As for the meaning, it is delegate that calls delegate that calls the actual method. You can verify this yourself by accessing the delegate's Method and Target properties. In the case of the outer-most delegate, Method is Action.Invoke and Target the inner delegate.