Explaintion for a ques

Why here we don’t take -2^n *Z[n] as part of the solution.
And I would be thankful if u gave me a pubic idea about what the circ do.

In order to understand what the circuit does, you can do a small simulation with two small strings and see what you get for them.
We kind of solved this question in recitation 11.
Z[n:0] is the representation in two’s complement of the number we get from the calculation of A and B.
Did I answer your question? If not, please upload the answer and be more specific.