If I understand your question, the windward (overlapped) boat is subject the the leeward boat going head-to-wind and forcing the windward boat into a less than desirable position? Except for the notion that they are in the mark 2/3-boat circle?

What if the two boats are unequal in performance (which would explain the different TWA pointing)? And the "inside"/windward ahead boat (pointing lower) enters the circle not overlapped by "outside" clear astern boat?

What options are available for the outside boat which would otherwise crawl all up in the inside boats shizzle?

If the inside boat (already pointing lower) overstands the mark, is the outside boat at their mercy all the way to Timbucktoo?

Were both of these boats on port tack in the original setup of this question?

I can guess that the parade of starboard boats would really turn this in to a fluster cluck of almost biblical proportions (and worthy of Youtube coverage)