In Act 1, you are seated in traditional (albeit ratty) theatre seating. You may notice a whole bunch of wicker garden chairs as you walk in - this is because in Act 2, the chairs are placed in a few semicircles on the stage, and you now sit there, watching the actors perform in the actual theatre seats.
It's assigned seating for both, and what might be a seat on the side for act 1 could end up being front and center for act 2 (and vice versa). The problem is that in order to fit all audience members in a few rows on the stage, everyone is jammed together. There is absolutely no room - and god help you if you are on the larger side, or are sitting next to someone who is.