I believe that important characters VERY distantly related (like more than 20 generations) should be able to form their own dynasty (and copy the legacies). On top of my head I can think about a few historical examples in which spiting dynasty would make sense:
1) The Abbasids, Ummayads, Alauytes, Fatmids all descend from the Hashmites. (I would like to know how those muslims families will be handed and whether or not they will share a same dynasty)
2) Capetians: the Babenbergs of Austria should probably be of a different dynasty despite sharing a same agnatic ancestor, because they didn't really have anything to do with each other. The Portuguese royal house started as Capetian branch, but they had hardly anything to do with the kings of France at the end of the game and no one really speaks about the link between the portuguese and french royal houses today. For a comparison they are even more remotely connected than the house of Courtnay, who were themselves denied as a member of the Capetian dinasty (prince of the blood) by the kings of France in the 17th century, because they were too distantly related.
3) The sons of Ragnar: Ivar left descendants in Celtic Britain and Ireland; Bjorn founded the house of Munso who rulled sweden for a while; from Sigurd descent the Yelling dynasty which ruled Denmark for a long time.
4) There are some nobles in Celtic Britain and Ireland that trace their dynasty even before the fall of Rome, and many share an agnatic ancestor. It would be weird if all of them share the same dynasty because of a very remote connection.
5) Gengis Khan: Gengis left a TON of descendants noble house. While there was certainly a connection between them, since they all boasted being descendants of Gengis. I think it is arguable that they split over time and it would be a little weird having a same dynasty head for such a long lived and big dinasty.