You are correct, it's because of the empty table. Because in that situation p/q would have have to be at tables 1 or 2 (doesn't matter which) then M would be at 3. So, O can't sit at table 4 because that would force N (N can't be at 3,5, or 7) to sit at table 6 leaving tables 5 or 7 to still be filled. Since L is the only variable left tables 5 or 7 would be left vacant (according to the rules 5,6,7 can't be empty).
I hope that helped a little.