Is it permissible for two people to form a new row behind the Imam because there is only one space left in the front row, or should one of them complete the first row?

If only one space remains in the row and two people arrive, it is better for both of them to stand behind the row and leave the gap for whoever comes after them. This is because forming rows is obligatory, while filling gaps is supererogatory. If someone is praying alone and finds a gap, it is obligatory for him to fill it.