I think it goes to whoever is next on the school's waiting list. Though I could be wrong, there shouldn't be a preference for OOS or IS, but rather which candidate is a better fit for the school (determined by: interview performance, GPA, DAT, candidates ideology, etc).
The schools I was accepted to allocate a certain number of slots for either OOS or IS and when a slot opens up they will replace that person with another applicant of the same designation.
The schools I was accepted to allocate a certain number of slots for either OOS or IS and when a slot opens up they will replace that person with another applicant of the same designation.