Your DOD area tour for your overseas location will not be curtailed for co-location.
Your (or your spouse's if you're on shore duty) sea tour will not be cut for co-location.
If you are both first term Sailors, you will both (or whichever one is already there) remain on sea duty to your PRDs, at that time the detailer may work to move one of you to shore and the other one to remain on sea duty. It's unlikely both of you will end up on shore duty together.
One of you will have to extend to the other's PRD, to match the PRDs up, ultimately. Also keep in mind that "co-location" might mean one of you is in San Diego and the other one is in Lemoore, or one is in Yokosuka and one in Sasebo - I've heard of both happening.
co-location is a request, the detailers are not required to honor it, and often the detailers don't like talking to each other to work things out. We don't know yet how all these new rules will affect it either. You have to be very flexible and willing to go where the detailers want to send you. You need to get both of your 1306's in, but you also need to be talking to both of your detailers at the same time to find out what they're willing to do for you and when they're willing to do it. You're a first-term Sailor, they're not going to be looking to move you around right now.
Here is MILPERSMAN instruction:
http://www.public.navy.mil/bupers-npc/reference/milpersman/1000/1300Assignment/Documents/1300-1000.pdf
Start early!
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http://www.public.navy.mil/bupers-npc/reference/milpersman/1000/1300Assignment/Documents/1306-300.pdf
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