Not quite, the accepting side would still see the mining of the non-accepting side. It's not mutually exclusive.
Depends which blockchain is longer, right? Isn't that the whole point of requiring more than 51% of the hashrate? If the blockchain with the >1MB blocks is longest, the clients on the accepting side will not see the mining of the non-accepting side because they will be working on a different blockchain. But if the blockchain with the <=1MB blocks is longest, both clients will see the same thing & be working on the same blockchain. Hints why it'd make sense to do it now because there aren't any blocks being generated anywhere near the 1MB limit. So both clients could co-exist for the time being. There wouldn't be any issue until a >1MB block is generated & accepting nodes own more than 50% of the hashrate.
The point is, at 50/50, the non-accepting side will eventually win over because the accepting side still accepts their blocks. At a certain point, their chain will be longer. At 51% or above, the accepting side should eventually carve their own blockchainbut it might take a while.