The set up you have is actually fine, you don’t need to do pre-bonding in neutral space, just the actual bonding sessions. So it’s good you’ve reserved the neutral area for later.
As far as nipping etc, you should set up the fence so they can’t nip each other through it. You can either use a second wall of fence of make a buffer of 4-6 inches between walls, or use something else to block the nipping (cardboard or a towel will do in a pinch). Storage cube grids make great temporary fencing as well.
It’s very normal for bunnies to behave this way when they are in their home turf, even if they get a long in neutral space, so don’t worry too much. Just modify the fencing so they cannot nip each other (as those nose nips can cause hurt feelings and make things harder down the road).
I usually aim for a couple weeks of pre-bonding and then see how they are doing. Some pairs benefit from longer pre-bonding. The hope is that they get more and more calm towards each other. You might see them start to lay near each other on opposite sides of the fence, or their behaviors might start syncing up (like they will groom themselves at the same time, eat at the same time, etc.). It helps to feed them near each other at the same time on opposite sides of the fence. I like to to wait until they don’t seem phased by the side-swap and just go about their normal business as though nothing happened (as opposed to running around thumping and chinning lol).
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The answers provided in this discussion are for general guideline purposes only. The information is not intended to diagnose or treat your pet. Seek the advice of your veterinarian or a qualified behaviorist.