string is not a keyword, just a predclared identifier. You can override it, e.g.

var string int = 3

Declares a variable of type int, value 3 and name string.

Similarly in your case, you're declaring the method Do on the generic type Foo, using the name string as the type parameter for the body of Do.

Dup of #48813

@randall77 Thanks for explanation.

But if we slightly modify the code:

package main

import (
	"fmt"
)

type Foo[T any] struct {
	t T
}

func Do(f Foo[string])  {
	fmt.Println(f.t)
}

func main() {
	x := Foo[int]{}
	Do(x)
}

we get:
./prog.go:17:5: cannot use x (variable of type Foo[int]) as type Foo[string] in argument to Do

Looks a little inconsistent.

I agree it does look a bit strange. But in the latter example you're not defining a new name string, you're using the actual predeclared string type and instantiating Foo with it. Type expressions in the receiver position and in argument position are very different w.r.t. generics.