Event Espresso isn’t built specifically as a booking system, though there are people that use it successfully as that.
As per your discussion with Josh here the feature is still in the experimental stage so should be used with care.
I have tested this on two test servers one running 3.1.26P and the other 3.1.27P and both worked fine, the time slots were counted down and removed when 2 users signed up, for both free and paid events.
As Josh mentioned one possibility is that these users are booking at the same time. I am wondering though how two users managed to book twice.
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