Can Node Operators set up another node in the Production environment? If so, can both of them be validator nodes?
Yes, they can set up another node.
At the Member State level, there should be a decision made by the EBP MS representative on which node will be the active validator at a given time. - MS (EBP member) selects from the active set who should be the validator. There should always be 1 node in the set of validators and 1 node in the active set of validators.