> \_b_ a -> a
<function> : a -> b -> c -> c
So _a_ is read as _ a_. Noticed this when trying to do the idiomatic thing of saying "here is a variable we are ignoring but still give it a name".
For some context, it is not possible to have variables in Elm that start with an underscore. This is freaky nonetheless, so thanks for the report! I'll try to circle back to this before 0.17 comes out.
Centralizing into #1374, follow along there
This is fixed by the new parser. The new error message looks like this:

Thanks for reporting this!
This seems to still/again be happening in 0.18. Not critical but caused some confusion.
---- elm-repl 0.18.0 -----------------------------------------------------------
:help for help, :exit to exit, more at <https://github.com/elm-lang/elm-repl>
--------------------------------------------------------------------------------
> \_a -> a
<function> : a -> b -> b
>
The new parser described above is to be part of 0.19 due to some breaking changes :)
Most helpful comment
This is fixed by the new parser. The new error message looks like this:
Thanks for reporting this!