The Master would be replaced, yes. If a Master in the war still has Command Seals, they could make a contract with a second servant. But the Master would need the mana necessary to sustain two Servants at once, and they would still only have one set of Command Seals.

[He paused for a moment, considering what had been said. Did Dazai have a plan in mind? Was he thinking of ways to end the Grail War without a fight? ...It wasn't for Bedivere's sake, was it?]

Ah, if you are looking for ways to keep me out of a fight, it's alright. I am a knight, after all, and I was summoned to fight. Caution is good, but some battles are unavoidable.