1. The word's order somehow makes the brain malfunction until many brain cells die, making the person mentally insane.
2. People who say it are already insane, but insane in a way that makes them say this strange sentence.
People who say it who aren't insane usually say it as a joke, to annoy someone, or they actually want to know.
Person 2: Yeah, why do you ask?
Person 1: (Brain Malfunctions) Cheese shall rule the world and kill us for eating their children!
Person 2: He's insane.
Person 3: So I heard you like cheese.
Person 2: I think you're insane.
Person 3: No, I just want to annoy you.