I thought the split timeline occurred because of Zelda using the Song of Time at the end of OoT.
How does it magically split once more if no more time shenanigans were involved? Just losing doesn't cause a dimensional rift.
I think its this.
Timeline 1
The original timeline when you start the game. When Link pulls the Master Sword, he is trapped in the Sacred Realm for 7 years. This removes him from this timeline, placing him in timeline 3 until he replaces the Master Sword.
Timeline 2
This timeline is created when Zelda sends Link back at the end of the game, she sends Link back to a childhood timeline, but its not the one that he originated from.
Timeline 3
Occurs when Link is awaken after the 7 years. When he restores the Master Sword, he goes back to timeline A, and when he pulls it, he goes to timeline B.
You know have this situation.
Timeline 1 is the original timeline the game starts off with, however since Link was removed from this timeline when he pulled the Master Sword and since he was never properly returned to it, this is the failure. Ganon discovers an entrance to the Sacred Realm and the Triforce, but is sealed by the 7 wise men (the backstory to A Link to the Past)
Timeline 2 is the timeline that Link is sent back to. The Door of Time is never opened, Link never pulls the Master Sword, but Ganon attacks anyways. He's arrested and the events of Twilight Princess happen (after Majora's Mask).
Timeline 3 is the Adult Link timeline. Ganon is sealed at the end of Ocarina, and then the events of Wind Waker happen.