Is it bad practice to increment more than one variable in a for loop declaration?
I would agree with the OP in that the second code block would be the best approach.   

Reason - readability.   In my opinion, the variable incremented in the for loop statement should only be used for keeping count of how many times we're looping.   count might be set before the loop, it might also be incremented / decremented in several different loops.   But in either case, count isn't used to keep track of the progress of the current loop - y is in this case.

So, I would say that it's best practice, for readability sake, to only increment the variable used to loop through the for loop in the for loop line itself.