Here's the general idea
1 AND 2 (ALL logic) means that the lead must qualify for filter 1 and they must also qualify for filter 2 in order to enter the campaign.
So if filter #1 is "not in" Smart List X
and filter #2 is "not in" Smart List Y
1 AND 2 means that leads will only qualify if they are not in Smart List X and not in Smart List Y.
If you said 1 OR 2 (ANY logic), then a lead must not be in Smart List X OR they must not be in Smart List Y. That means that someone could be in Smart List X, but still qualify because they are not in Smart List Y. That is, they could be a competitor, but qualify for the campaign because are not an employee.