Confondues doesn’t mean “combined”, it’s closer to “confused” when it means indistinguishable.

So deux droites confondues means two straigth lines that are impossible to distinguish from each other, i.e. two straight lines that might have different definitions but that share all of their points.

See the TLFi:

CONFONDRE, verbe trans.
I.− [L’accent est mis sur l’idée de non-distinction]
A.− Mêler si étroitement (soit plusieurs choses ou personnes, soit une chose ou une personne à un ensemble) qu’il n’est plus possible de les distinguer.

Etymologically, confondre means fondre ensemble, i.e. melt together.

Note: In geometry, the definition of parallel lines is the set of lines that share the very same direction (vecteur directeur). That means any given line is parallel with itself.

When we want to exclude that case, we say droites strictement parallèles.