Assuming you can confirm the upgrade at the time of booking it obviously does not matter. Assuming it is waitlisted, CR1's and SWU's go on the PA waitlist, and miles typically go on the PB waitlist. Also, non 1K's go on the PB waitlist, but there are exceptions to this. The PA waitlist clears first, and up until departure managements upgrades are confirmed based on the other they are requested.

Assuming the upgrade still does not clear until Departure Management the PA and PB waitlists no longer matter, and it goes by status, then fare basis, and finally time added to the waitlist.

So, to answer your question, assuming the miles go on the PA waitlist the 1K who added themselves to the list would clear first, unless it goes to DM. At that point it comes down to fare paid and time added.

I know there are a couple of errors in here since I just typed it quickly, but that's my shot at it.