Flight Instructor reported a NMAC and had observed their solo student on short final with another aircraft also on short final abeam them.

Narrative

After 6 loops in the pattern together (left closed traffic Runway XX at ZZZ in Aircraft X) with my student; I got out so that he could complete his first solo. During this practice; a helicopter entered the pattern on a left base leg in front of us. My student and I both noticed this conflict; extended downwind; then executed a go-around due to them lingering on the runway longer than expected. The first two solo loops were uneventful.On the third lap; my student made all normal traffic pattern radio calls. The following is what I witnessed from the ground and via ADSB-In traffic data received on my iPad:During my students downwind leg; Aircraft Y entered the pattern on a left base leg almost directly on top of my student who was also in position to turn base.Having known the other instructor; and having flown with him for a short time to time build; I expected that he would be using his experience; situational awareness; and Stratux that he routinely used on our flights to see that he and his student were causing a direct conflict with my student who was in the pattern. My student unfortunately did not comprehend based on their radio calls that they were in him immediate vicinity. He also did not have a method of receiving or viewing ADS-B traffic data to help spot the conflicting traffic. They both continued their approaches; each calling base/final at about the same time (and my student mentioning that he is a student pilot during his base turn). Through the whole sequence of events; it appeared based on traffic displayed on my iPad that they were close; however I assumed the instructor in Aircraft Y had my student in sight and would execute a turn or go-around to deconflict. There were multiple points where it appeared to me that they were deconflicting; so I did not make a radio call so as to not confuse my student who I believed was either the one executing the deconfliction maneuver; or unaware of the other aircraft; and focused on landing. My fear was that alerting him would cause him to also attempt a go-around; while in front of Aircraft Y and cause further conflict. I don't recall if either aircraft was obviously in front of the other or not; or who made their radio calls first. Another aircraft transmitted a warning that two aircraft were on short final at the same time. My student says that this was the moment he 'looked left; and noticed the other airplane; about two airplane widths away'; and executed a go-around. Aircraft Y proceeded to land; and taxi back via [Taxiway] 1 and 2; and hold short of Runway XX. My student flew the pattern one final time without incident; and taxied back to the ramp via 3; and Aircraft Y continued to fly patterns after my student cleared the runway. After their flight completed; the other instructor texted saying that 'he did an excellent job joining up on our left wing'. I'm unsure at what point he spotted my student; or why he did not execute a go-around upon having spotted the conflict.