This is a limitation of the GDSes and PNRs. Basically, because you can only have a flight appear exactly once in your PNR for a given date, and the booking class is an attribute of the data structure of the flight segment, you can only have one flight, date, and booking class combination for all of the passengers in that PNR.

e.g. The itinerary in your PNR looks something like this:

The bold portions above are the booking inventories for those flight segments.

So, in those boundary cases where let's say N1 was left and S had 4 seats, the natural thing to do would be to split 1 pax in N and 1 in S (which is what ITA does when they shop if that's how your servers are configured).

However, to actually fulfill and ticket these cases in a legacy GDS, you need to split the passengers across two PNRs, which is called dividing the party.

This is a long-standing limitation, that frankly I'd love to see be eliminated from the res systems. However, in the meantime, online booking engines must either put all passengers in the same inventory, or have special logic to split them across multiple bookings.

All follow the former pattern. Anyone familiar with G2 Switchworks know if they designed this capability into their res systems?

Cheers.