Character evasion is a property of the NavMesh they're both standing on - not the characters themselves. Have a read over Section 2.13 of the Manual, as you'll need to be aware of performance impact etc before tweaking it.
The separation distance between two characters will be determined by the radius of the character not having their NavPath calculated. The two characters aren't too close in the image - they're circles will overlap, but their centres shouldn't enter each others circles.
If you enable "Gizmos" in the Game Window, you can see their NavPath as they move. Are you seeing their paths get re-adjusted to move around each other? You may have to set a non-zero Pathfinding update time (in the Settings Manager) if you want two moving characters to avoid each other.
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If you enable "Gizmos" in the Game Window, you can see their NavPath as they move. Are you seeing their paths get re-adjusted to move around each other? You may have to set a non-zero Pathfinding update time (in the Settings Manager) if you want two moving characters to avoid each other.