Why does lactulose turn dark?
When milk is heat-processed, some of the lactose will isomerize to lactulose, a disaccharide.  Lactulose 



can decompose by the same routes that most sugars decompose.  These are complicated processes with many products and pathways, so sugar decomposition is rarely, if ever, fully understood.


It can hydrolyze to its constituent monosaccharides fructose and galactose.
Lactulose or its released monosaccharides equilibrate with their ring-opened isomers and the alpha-hydroxyl can air oxidize to produce an alpha-dicarbonyl.  These alpha-dicarbonyls are prone to further oxidation to generate formic acid.  Over time, as the solution becomes more acidic from the formic acid build-up, further oxidations and eliminations (dehydration) can take place to produce a mixture of colored products.
In addition to degrading to smaller molecules, sugars (and the dehydration and oxidation products mentioned above) can also oligomerize to produce a variety of viscous, colored products.  Caramelization (see the "Chemistry" section in the link) is a term applied to this chemical polymerization and coloration process.


If you would like to read more about lactulose and its decomposition, take a look at this reference, especially section 7.2.1 starting on page 236.