There are two ways an Arena can get "overcrowded":
The arena limit was just downsized according to dropping overall number of players in both LW arenas or when the arena limiter itself kicks in after being basically disabled during off-peak hours. That results in numbers like 200/120.
(Edit: basically what Husky 01 tried to explain above)
The second way: When an Arena is near its limit. When the population is for example 319/320, everybody going to the loginscreen sees that number. If it happens that 6 different players do that at the same moment, they all see 319/320, and they all are able to enter the arena. Resulting in a 325/320 population.