Best to have them either seated or standing in a circle or semi-circle with a mic on each speaker, and some distance between each…so that the adjacent mics pick up relatively little cross-spill of the nearby speech.
You don’t require great isolation, but if there’s too much spill it will produce a thin,hollow or phased quality to the voice.
Directional (ie cardioid) voice mics are preferable to omnis, and if the speakers are unused to recording their voices, be sure to locate the mics below the chin pointing up to the mouth….or around forehead height pointing down at the mouth, to avoid the plosive pops of air velocity as they produce the sounds of words beginning with “p” and “b”
Dynamic mics are fine for this purpose, small diameter cardioid condensor mics are especially prone to the popping phenomenon…and in the latter case the supplied small foam balls don’t reduce the popping much, if at all….hence my above/below mouth advice. If you record these pop sounds, you won’t be able to remove them….so it’s much better to prevent them at source !