The picture shows the entropy changes (arbitrary units). Entropy of a gas increases on expansion.
The gases diffuse into each other; entropy increases. It is never observed that the gases separate spontaneously; for this latter process, entropy would decrease. Entropy of each individual gas increases. Conclusion: entropy of matter increases if more space is given to it.
The system as a whole represents an example of a isolated system; neither heat nor matter cross the system boundaries. On the other hand, the individual compartments are open systems, since they exchange matter with the respective other.