Hi Alice,
Good observation. Your photo shows a fresh instar caterpillar of Papilio machaon, having shed its former skin.
Where the smaller caterpillar went, I can't say. But they are eaten by birds; Sardinian warblers know these little morsels are to be found in my Crithmum maritimum, for instance. I suspect it was not eaten by the larger caterpillar, as that would have been busy with its moulting at the time.