Yes, that's breeding behavior, your bigger bit on the neck.. normal.
The head bobbing shows their interest, the waving really isn't a social response, more over it waves off aggression from the males,
You might notice if the smaller one doesn't want to be breed quite yet, it'll wave rather quickly rather than the normal slow steady motions.
What concerns me, is that you said the smaller bearded is a male.. sure it's not a female?
I know larger males will head bob to smaller males trying to show off during breeding season (Figured it out this weekend),
possibly in confusion and in the high "arousal" of the season... but to take it further biting the neck.. and the smaller male waving his arms, that's not something I've seen before, I didn't even know males knew to do that motion. thought it was a female thing.
Get it confirmed about the smaller's sex, I understand males will set up dominance, but that sounds like breeding behavior.
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2.4.1 Leos
1.1.13(eggs) Beardie
2.0 Burm
0.1 Common Boa
0.0.1 Sand Fish
0.2 Desert Tortoise hatchlings
Wish for: Candoia Sp, Frilled D, BTS