It happens when we are missing one dancer in the last square. The trick is to add an extra 'phantom' couple to the rotation. Whichever couple gets the 'sitout' has one dancer dance with a phantom, and the other dancer dance with the leftover single dancer. The square with only 7 people can then decide to either sitout or dance with a phantom. That's the whole point of the dynamic mode.
Couples can enter and leave the rotation at any time.
They can request to sit out a specific tip, etc. I have a copy of your couples rotation program. I have read your description of how the placement of dancers is generated. At some of the dances we attend, another couples rotation program is used in which the couples are weighted by some preassigned ability level. That is, these couples are rated C3A , some are rated C3, and others are rated C4.