Well, Chubby's flight would've looked far more hetero if it were a Hornet against the Fulcrum, but rep points nonetheless...
"Two circle" derives from the idea that at a neutral merge, the fighter turns left, the bandit turns left as well-- as per the pic. Thus, the plane that accomplished the most degrees per second (i.e, "rate numbers") will ultimately win. This may results in several 360 degree circles through the sky-- very painful, high-G, going downhill to the deck. The "rate war" so to speak.
This does not have to be as depicted... anytime a fighter finds himself on the bandits' tail... say, with 90 degrees to go, he may want to get on his rate numbers and attempt two-circle flow. Does that make sense at all?
I'm probably not the best at explaining this... maybe A-4s or Schnugg could do better... might work easier on a cocktail napkin over a nice brewski