There is migratory insertion forming the first bond between the two species, but no electrophilic aromatic substitution as I have it written. I have surmised, BASED ON THE CONDITIONS GIVEN, that there is no electrophilic aromatic substitution but a hydride elimination from the phenyl ring and a new bond forming to close the ring. A colleague of mine and I discussed if it may be possible and we came to the conclusion that due to the ability of a phenyl ring to coordinate with the palladium center it isnt a reach to say the aforementioned mechanism is possible.
Again I came up with this based on the conditions. You would need to generate a electrophile after the initial Heck reaction and regeneration of the pi system.
The way I have it written it is not the most correct representation. The bond to the bicyclic ring is actually more of a pi complex with the palladium after the migratory insertion of the biphenyl sysyem.
I have attached a picture of my thoughts with some explanations.
I have to also admit that I am not very experienced with mechanistic chemistry of transition metals. I have been told by some very experienced and smart chemists that no one really knows what goes on for sure.