[silvarilon]

That makes sense. But I'd still consider allowing interference in the fight.

That will open up the tactical options for the players without you having to put in any extra work.
If you can PK someone while they're fighting a monster, then I'd need to consider if I trust the other PCs with me before fighting the monster. Or if I want to PK someone I might try to catch them while they're distracted or weak from another fight.

Similarly, more monsters joining the fight - that can also be part of the tactics. I might be able to beat one Yeti with ease, but midway through the fight another yeti arrives. Do I flee now, or try to win?

I think "interferences" like that help add to the game. Makes it feel more like "there is a fight happening in that cave which I can join in on" rather than feeling like a sporting match where everyone waits their turn. "I can't fight the yeti until it kills the other fighter first" etc. - and it also creates more tactics for the players.

You'd need to write your combat system to be able to handle multiple fighters. But you'd save by not having to worry about instancing the rooms.

Of course, if you don't want interference, there's still no need to instance the rooms. Just have code that if someone tries to join the fight it says "You can't attack Bob while he is fighting a yeti"