It seems to me both guilds would be gaining. Any guild making more than they lose is advancing.
Also a 400 player guild is much more likely to be earning 5 renown/day/player than 500 after considering that 200 of those members are likely on the slow road to inactivity due to the fact they no longer play, 150 of them play occasionally, 30 play rather casually and the remaining 20 cover the lions share of the renown the guild earns. While the small guild likely contains 10 generally active players or they never likely would have met to form up in the first place. IMO, the main reason players form large guilds is to make the minority that are actually playing at any one time a viable number of players.