Please take a look at the guide on the waitlist functionality here.
Throughout the booking process when the customer is booking online, they will be informed they are on the waitlist at each stage:
When selecting the slot...
When the item is in their basket...
In their confirmation email...
However, at no point does the customer see the number they are on the waitlist. Also, there is currently no way to limit the number of people that can be on the waitlist at a time, this is not capped.