In the Subset Axiom:
Let $\phi(x)$ be a formula. For every set $A$ there exists a set $S$ that consists of all the elements $x \in A$ such that $\phi(x)$ holds.
the formula $\phi(x)$ contains only one free variable ($\phi(x)$ could contain other bounded variables and parameters). Consider the following statement where $\phi$ is now a formula of two free variables $\phi(x, y)$.
Let $\phi(x, y)$ be a formula. For every set $A$ there exists a set $S$ that consists of all the elements $x \in A \text{ and } y \in A$ such that $\phi(x, y)$ holds.
Will the axiom and the above statement be compatible with each other? By compatible I mean no contradiction arises when both are true.