Let's look at it bit by bit. Firstly the format
sudo -u username command
is an instruction to run command (which might be simple or complex) as the user username. So in your example, you are running the mysql command as the user test-user. You should note that this includes all the parameters to the mysql command - that's the entire rest of the line.
The command
mysql -U test_traffic traffic < ./phoenix/data/sql/lib.model.schema.sql
appears corrupt (certainly running it on 5.0.51a fails). It would make sense if the -U was a -u which would indicate that that the command was to be executed for mysql user test_traffic. If it was a -u you would then have an instruction to import the sql file into the traffic database.
So the combined instruction says, import the lib.model.schema.sql file into the database test_traffic using the mysql user test_traffic and executing the entire command as if you were logged-in as the user test-user.
sudoandmysqlthen what's left to explain?sudo -uswitches to another system user (not root) andmysql -Usimilarly selects a MySQL user name.