SELECT 
    T2.F_VAL,
    T1.P_VAL
FROM
    T1, T2
    WHERE T1.P_KEY=T2.F_KEY

query basically performs inner join of T1 and T2 tables on P_KEY and F_KEY columns respectively and will return the following data:

F_VAL          | P_VAL
------------------------
London         | UK
Moscow         | Russia
St. Petersburg | Russia

“Kiev, Ukraine” record will not be returned by it as NULL to NULL comparison is not equal to TRUE (but it is not equal to FALSE either).

COUNT(DISTINCT T1.P_VAL) AS P

will return 2 as DISTINCT keyword inside aggregate function guarantees that distinct values will be counted only (repeatable values will be excluded).

COUNT(T2.F_VAL) AS F

will return 3.
Ultimately the SELECT DISTINCT clause will return 3, 2.
Strictly speaking, the DISTINCT keyword is redundant here as query returns only 1 record.