Mixed based replication between two databases on the same server I have two apps with a current configuration as follows:

App1 


DB on server A/MySQL Instance A


App2


DB on server B/MySQL Instance B


Students can apply for internship using App1 and those applications are stored on App1 DB. Because we want to be able to review those applications on App2 and update their statuses. Master-Master replication is used and we are able to get 
the apps. Now requirements have changed and we want both Apps and DBs to be on server B with a presume config as follows

Server B

App1 
App2
MySQL Instance B contain DB1 and DB2


How can I configure Master-Master replication between two databases on the same instance or is it better to have just one DB now and make both apps use the one DB?
Have two instances of MySQL on that one server.  Each has its own data directory, its own port (3307 is typically used for the second one), each has its own my.cnf and logs.  But, since they share the RAM, you need to cut back many tunables relating to RAM.

Why?  What do you gain?  Certainly not HA.  You may be able to better use lots of Cores.  But you are doubling the "writes" on that machine (since the 'Slave' is repeating the writes).