its basically a combination of the two.
start in state "0,0". where "m,n" is the number of matched bits of sequence m,n.
if you see a 0, you transition to the same state (no progress made on either sequence), on a 1, you transition to state "1,1"
from state 1,1 you will see either a 0 (2,0) or a 1. (1,2)
from state 2,0, a 0 will put you back in state 0,0 -- neither sequence has two zeros in a row. a 1 will move you to 3,1
from 1,2 a 0 wil move you to state 2,3 (eg, you have seen "10, which is part of the first sequence, and 110 which is part of the second). a 1 moves to 1,2. (the input 111 still matches 1 from seq1, or 11 from seq2)
at 3,1 a 0 moves you to 2,0. a 1 moves to 4,2
at 2,3, a 1 moves to 1,4. a 0 to 0,0
4,2 can move to 2,3 or 1,2
4,1 moves to 2,3 or 1,2
this process continues. There is logical savings if you end up with less than 25 states. in the above it looks like there are only 8 states. eg, there is no pattern of bits that would place you in the 3,3 state. in this case, 3b can be used to encode the 8 states, as opposed to 3b (for 5 states) for two state machines.
(there may be some logical issues with the above state machine. I haven't double checked it.)