Itunes smart Playlist with reference to Apple Music favorites won't sync to Iphone
Unfortunately you are not able to sync Smart Playlists that contain a rule referencing another playlist with Apple Music tracks.

In some cases you may be able to get around this by making a normal playlist and putting Smart Playlists in that (for example my top 100 played tracks and my Loved tracks), but as you are trying to get just the intersection that wouldn't work.

Can only suggest giving Apple feedback at:


http://www.apple.com/feedback/itunesapp.html
http://www.apple.com/feedback/apple-music.html