I'm not an expert on the topic, but FWIW -
My 9 year old twin boys were in the same K and Grade 1 class. That was fine, but by the end of Grade 1 the teacher to make a specific effort to keep them separated in class. When they were bored they tended to get really goofy, which was very disruptive.
Grade 2 we finally had an opportunity to separate them. This was fine for one, who had another child he could at least talk a little bit to about some of his interests. My other son had an absolutely miserable year. He had friends in his class, but no one to really talk to about the things that interested him.
Grade 3 they were together again. This helped in some ways, but they found a third musketeer and were horribly disruptive as a trio. They'll have to be together again this year, which I'm not thrilled with, but it is the only way to keep them in their current program.
Competition between them hasn't been a direct issue, or at least not any more than keeping them apart in the first place. When looking at papers that one brings home, I do have to actively send the other one away and tell him it is none of his business, or he will get his nose right in & that causes problems.
As for the other point. My son's don't face this situation, but my own elementary school had a class and a half of my grade, so it was always one split and one full class. We had extremely low mobility in our little community, so with the same group each year, they were able to tweak it each year. We had a fairly large group of very good students, most of whom worked well independantly, and three specific struggling students. During the last two years they divided the group as follows:
Full Class: high achievers and MG students, plus the three struggling ones.
Split class: average students and the lone PG boy.
I heard talk that the point was to allow the teacher to give advanced work and still be able to work with the stragglers. ... Cut to after high school. At least 80% of the full class went on to complete post-secondary education. A couple of the split class did. The PG boy dropped out of high school. (He had been allowed to go ahead and work at his own pace in grade 2, and it took a full month before he burned through all the material in the school. They seemed to have pretty much given up at that point.)
Take from it what you will. Both my experience with twins in the same class, and that form of grouping is just a single example. Maybe not the best one.
