I'll give you an example of a typical situation here.
Dublin to Cork
In early 2011 there were two multi-stop services, one operated by Aircoach and one operated by Bus Eireann. Aircoach were 8 times daily at that point and Bus Eireann were 6 times daily. The stopping patterns were somewhat similar, about 7 stops, Aircoach stopped at one stop that BE didn't and BE stopped at one Aircoach didn't. They were considered multi-stop licenses.
Then in late 2011 Aircoach applied for a non stop license. The list of licenses is published every month by the regulator on their website. I presume that another company, Go Bus, saw this and applied for their own license in early 2012 and they were given the second license, at this point both the licenses were taken up so no more could be applied for.
The Aircoach service is about 17 times a day whereas the GoBus is about 10 times a day now, but it's changed a lot as they only launched a good few months after Aircoach, who by that time went from the first few weeks of carrying thin air to needing reliefs on a regular basis as they attracted a large number of people out of the car and out of the train. Recent figures says that the launch of those two services increased the number of passengers using bus between Dublin and Cork rose over 60%.
Because of the fact that the non stop services launched and were much more attractive for the majority of passengers on the existing Dublin to Cork multi- stop routes, of which 80% of the passengers were going between the two cities, this decimated the numbers on the multi-stop services, which resulted in Aircoach first cutting back the frequency of the multi-stop and then dropping the route altogether, which if nothing else, allowed the Bus Eireann service to pick up a number of Aircoach passengers who no longer had a service which helped their numbers a little.
In turn, BE then modified their Dublin to Cork multi-stop route to trim out three of the places served en-route. Now between Dublin and Cork they serve four towns instead of seven and the regulator would consider that as still being a multi-stop service as whilst the stops are still limited in comparison to what they were before, they would not consider them as limited enough to be called a limited stop service. Now history has shown most of the time that anything with 3 stops or below tenders to get classified as limited stop.
This might be helpful
https://www.nationaltransport.ie/bus-licensing/licence-categories-2/
It's basically what is considered to fall into what category for a license.