Full Idea
We find that two shadows or two rays of light interpenetrate, and we could devise an imaginary world where bodies did the same.
Gist of Idea
We can imagine two bodies interpenetrating, as two rays of light seem to
Source
Gottfried Leibniz (New Essays on Human Understanding [1704], 2.27)
Book Reference
Leibniz,Gottfried: 'New Essays on Human Understanding', ed/tr. Remnant/Bennett [CUP 1996], p.230
A Reaction
I suspect this is a case of being able to imagine something when you don't fully understand it (like a bonfire on the Moon), but when you fully understand the modern physics of it, you see the necessity of separation between objects.