ArrayList Contents Modifying Unexpectedly

Pulled an interview question out of an old java certification book I have from back in the day.

Don't want to really want to get into whether of not it is a good interview question or not. Its purpose was as a simple sanity check that the person has worked enough with simple collections in Java ... I did not expect an incorrect answer, anyways, they got it wrong at several steps along the way ... so it served its purpose.

The surprising part to me though was that after putting it in RAD and running it was the output at step 8 ... java is behaving as if list1 after the addAll is not holding the values that were contained in list2, put a reference to the values in list2 ?! Since the clear of list2 altered the contents of list1 ?!?

Yet the modification of list2 prior to the clear at step 7 had no effect on list 1 ... my day's work will now be derailed going through documentation on collection implementation lol ... this was not what I expected at all ... can anyone explain the reasons for the contents of list1 at step 8?

public static void main(String[] args)
{
    List list = new ArrayList();
    System.out.println("1: List1 Post - Constructor\t\t" + list);
    System.out.println();

    list.add("1");
    System.out.println("2: List1 Post - Add 1\t\t\t\t" + list);
    System.out.println();

    list.add("2");
    System.out.println("3: List1 Post - Add 2\t\t\t\t" + list);
    System.out.println();

    list.add(1,"3");
    System.out.println("4: List1 Post - Add three at index 1\t\t" + list);
    System.out.println();

    List list2 = new ArrayList(list);
    System.out.println("5: List1 Post - list2 Constructor\t\t" + list);
    System.out.println("5: List2 Post - list2 Constructor\t\t" + list2);
    System.out.println();

    list.addAll(list2);
    System.out.println("6: List1 Post - Add list2 to list1\t\t" + list);
    System.out.println("6: List2 Post - Add list2 to list1\t\t" +list2);
    System.out.println();

    list2 = list.subList(2,5);
    System.out.println("7: List1 Post - List 2 sublist of list 2,5\t" + list);
    System.out.println("7: List2 Post - List 2 sublist of list 2,5\t" + list2);
    System.out.println();

    list2.clear();
    System.out.println("8: List1 Post - list2 clear\t\t\t" + list);
    System.out.println("8: List2 Post - list2 clear\t\t\t" + list2);
    System.out.println();
}

1: List1 Post - Constructor                 []    
2: List1 Post - Add 1                       [1]    
3: List1 Post - Add 2                       [1, 2]    
4: List1 Post - Add three at index 1        [1, 3, 2]    
5: List1 Post - list2 Constructor           [1, 3, 2]    
5: List2 Post - list2 Constructor           [1, 3, 2]    
6: List1 Post - Add list2 to list1          [1, 3, 2, 1, 3, 2]    
6: List2 Post - Add list2 to list1          [1, 3, 2]    
7: List1 Post - List 2 sublist of list 2,5  [1, 3, 2, 1, 3, 2]    
7: List2 Post - List 2 sublist of list 2,5  [2, 1, 3]    
8: List1 Post - list2 clear                 [1, 3, 2]    
8: List2 Post - list2 clear                 []