There’s a biological concept called sympatric speciation where a separate species can branch off despite living in the same area as the original animal.
There’s no real reason for it other than behavioral barriers. Coyotes and wolves just act different and don’t typically want to associate or mate with each other. The more these behaviors get reinforced, the farther apart the two species get.
Canis is kind of an odd genus though, since basically all canids can successfully interbreed. In most other animals, the ability (or lack thereof) to create viable and fertile offspring is typically a factor in determining species.
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