Let me see if I have this right ... and I will use numbers that are easiest for explanation and not the real numbers.
If ...
LW1 and LW2 have a cap of 100 and when an LW arena population reaches 50% of the cap, the other LW cap is increased by 50 seats.
So ...
Once LW1 reaches 50 players, LW2 cap is increased to 150 and LW1 still has room of 50 more players before is reaches its cap.
Once the 100 cap is reached in LW1 no more entry is allowed.
Now that LW2 cap has been increased to 150, players will begin to fill up LW2. Once LW2 reaches a population of 75 players, LW1 cap will be raised to 150. At this point, people really have a choice of LW1 or LW2 because neither has reached their respective caps.
So at this instant we would see ...
LW1 - 50/150
LW2 - 75/150
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Now lets go back to the beginning and start again ...
Once LW1 reaches 50 players, LW2 cap is increased to 150 and LW1 still has room of 50 more players.
Once the 100 cap is reached in LW1 (current numbers in LW1 are - 60 Rooks - 25 Knights - 15 Bish) and someone selects LW1 while the cap has been realized, they are presented with another popup choice ...
LW1 - Knights (until they reach a population of 60*)
LW1 - Bish (until they reach a population of 60*)
LW2 - Open for all at the moment
*60 is set by the highest single population at the point that the cap had been reached ... in this case, the Rooks had 60 when the cap was reached.
This way, someone who wants to play in LW1 and is willing to join one of the weaker sides, is allowed entry. So ... If I choose Bish ... the the cap is now 101/101 ... so on and so forth until balance is achieved (180/180), and at that point, there is no more entry into LW1 until LW2 has reached its saturation point causing the cap in LW1 to be increased.
So if LW1 did reach 180/180 by people choosing the under populated countries and LW2 eventually did reach it 50% saturation point, the new cap for LW1 would be 180 + 50 = 230 so we would see ...
LW1 - 180/230
LW2 - 75/150
I realize that this would take some coading, but it could help to alleviate lopsided numbers in "capped" arenas using people who don't care what country they belong to.