If they are getting along in her area 24/7, that's great! But I wouldn't rush to expanding their space yet. I would give it at least a couple weeks of making sure they are really settled with each other, then gradually start expanding/changing their living space to include his. Once that's done, then I would gradually start expanding into the shared area where you let them out to play. You just don't want to give them too much space at once, as that can sometimes set off territorial/hierarchy issues again, which could set them back to square one.
With rabbit bonding there are general steps to go by, but it's all trial and error. and rabbits can throw us for a loop not behaving in the way expected. Sometimes things don't work the way they're supposed to. Like your two rabbits having issues in a neutral space, but seeming perfectly happy together in her space.
They're very cute all snuggled up together That's exactly what you want to see.
With rabbit bonding there are general steps to go by, but it's all trial and error. and rabbits can throw us for a loop not behaving in the way expected. Sometimes things don't work the way they're supposed to. Like your two rabbits having issues in a neutral space, but seeming perfectly happy together in her space.
They're very cute all snuggled up together That's exactly what you want to see.