When a wolf tags a sheep, they join hands to form a larger wold and must co-operate to catch more sheep. When a wolf has four players holding hands, they may choose to split into two two-player wolves. All of the wolves must co-operate to catch any remaining sheep.
Game ends when the last sheep is caught - they become the first wolf for the next game.
A four-player wolf may not split up. The wolf justs gets bigger and bigger. A number of British players told me this is how they play. As the wolves tend to be as slow as their slowest rider and are rather slow to turn, I would have thought that the wolf would become so cumbersome as to be unable to catch the remaining sheep. Your Mileage May Vary.