Quick question about player management in Worlds.

I'm in the planning process for another attempt at a world, this time trying to take into consideration better player management. Having learnt recently how to manage cameras and player controls I have a question about how you manage a lobby. Is it possible that your world can have more than the max number of players you set in 'Players Settings' what happens if your world is "full"? Does this just work transparently a world that is supposed to be 1v1 (max 2 players) will just spawn to demand or can there only be one instance of a world running?