Can't get "wait listed" to work

What I wan't to do is the following:

-Users can signup and get status "Registered" automatically until the signup limit is reached.
-When limit is reached, users can still sign up, but will be placed in status "Wait list"

The problem is that when the limit is reached the signup automatically closes. The documentation says something
about a wait list feature that I interpret as something similar to what I want to do but i don't get that to work.

How is the wait list feature supposed to work?