An in-place interface is required to link together the two regions in order that a conformal mesh be created at the common interface planes during the surface and volume meshing process. If an interface is not created in this example then the surface and volume meshing will not proceed correctly due to the close proximity of neighboring boundaries which are not connected together in any way.
To create an interface:
Two new interface nodes will appear in the simulation tree, one for each region, as shown below:

These two new nodes compose the two halves of the in-place internal boundary interface between the fluid and solid regions.