Could have been a lot worse . How could you make such a mistake 
Given that it appears to have been a coordinated jump I wonder why they didn't form up in such a way that the aircraft could see each other throughout. It seems one was following the other, and the sun was low in the sky. I wonder if the following aircraft lost sight of the leading aircraft and overtook it, then climbed or descended into it?
Quite apart from the risk to the aircraft, dropping parachutists with one aircraft following another seems to me to be a recipe for someone to get mashed up in a propeller. 
exactly ... in all the drops I've done, and its in the hundreds - note.... flying the aircraft NOT jumping out of a fully serviceable one !! - there are only FOUR possible aircraft positions for a multi drop.... and the aircraft should ALWAYS have matched speeds
1. Aircraft at same height, wingtip to wingtip
2. Aircraft at same height, line astern, very close so as to almost be one aircraft and all jumpers leave both aircraft at the same time.
3. Aircraft at the same height, line astern, distance between depends on speed but all jumpers depart when over the same point on the ground - this ensures the jumpers from the first aircraft are well clear by the time the second aircraft reaches the ground release point - this is the most common military method, for what is called a "stream assault"
4. Aircraft at different heights, following aircraft is ALWAYS higher than lead aircraft, this ensures that as the jumpers leave the second aircraft the lead aircraft is travelling away from them faster than their forward throw, and the gap is getting bigger.
It is possible to do multi drops from aircraft of very different speeds - C130 with Dakota being one we did lots of... especially at this time of year ... but the planning and co-ordination was very meticulous to avoid any danger to the jumpers