Let $(X, \Lambda)$ be a measurable space and $\mu$ be a measure on $(X^2, \Lambda \otimes \Lambda)$. Assume that the diagonal $\Delta = \{(x, y) : x = y\}$ is measurable. Suppose $\mu$ has the property that $$\mu(S \times T) = \mu((S \cap T)^2)$$ for any sets $S, T \in \Lambda$. Is it the case that $\mu$ must be nonzero only on the diagonal, i.e. $\mu(\overline{\Delta}) = 0$?
This seems intuitively obvious but I can't figure out how to prove it. My hope was to use a decreasing sequence of covers of the diagonal using squares $S \times S$, but I don't know how to obtain such a sequence without more assumptions on $X$.