My interpretation is that the law does not regulate who the head of the family (or the head of the dynasty) is, as that is a private matter and not a public one. The Act of Succession only specifies who will become the next monarch (and, simultaneously, under the Instrument of Government, the next Head of State ) when the throne is vacant. Currently, that person is Victoria.
Under agnatic succession, there was no conflict since the most senior living agnate in the dynasty was always also the king. Under male-preference primogeniture, a female dynast could succeed (if she didn't have any other lliving brothers like Princess Elizabeth of York or Princess Victoria of Kent), but, under the old (pre-20th century) conventions, the dynasty would become extinct once the reigning queen was deceased. Absolute (i.e gender-neutral) primogeniture has raised new issues, which IMHO are better solved by following e.g. the Belgian model where, instead of having a royal dynasty named after a specific family, the royal house is referred to simply as "House of Belgium".