So I've been reading a bit on the Welf Dynasty and I see that there's a distinction between the Elder House of Welf and the Younger House of Welf, from what I can tell, the last in the Elder House to be alive married into another family and formed the Younger House. How does that work? How did her descendants inherit the Younger House and not the Este dynasty, and why is the distinction made?
If I understand the nomenclature and laws correctly, the male line of the House of Welf died with Welf IV's maternal uncle, the last male descendant of the House of Welf. Welf IV's mother had married into the House of Este (Alberto Azzo II), which also had a line branching off from the younger brother of Welf IV, Fulco. Because Welf is older, he is considered to head the elder branch of the House of Este while Fulco heads the younger branch. At the same time, since the male lines of House of Welf are dead, Welf IV, technically still a Welf, can pick up the bloodline as the younger of the two lineages.
IIRC (and consulting a family tree), Welf IV is also the oldest male descendent of a daughter Welf (that is, of the Welf women who married into other families, the oldest woman with a son was Kunigunde). That means, by inheritance rights, Welf IV would receive his family titles and holdings. As for why the Welf's didn't control the Este holdings, that I cannot answer, though I suspect it has to do with preoccupation with Saxony holdings and trusting the younger branch to be caretakers. FWIW, the family lost Este proper by conquest in the 13th c. to Ezzelino da Romano III.