E.,
I would explain to the older girl... but I would talk to the mom on the phone this way there is no confrontation especially in front of the children.
You could also explain that being 10 that you just think she is too old to be playing with your 4 yr old. I can't imagine any 10 yr wanting to do that.. they would be BORED to death.
Also you don't want her to negatively influence your DD.
She "KNOWS" stuff at her age, that you don't want your DD exposed to as of it.. I mean she is considered a TWEEN for goodness sake. I would think that the MOM would understand, but then again... she has you as a free babysitter and her kids are out of her hair and in yours.... know what I mean.
So of course the MOM wants you to know that. :)
She gets some much needed "ME" time and you get your house tore up and have to constantly moderator the older girls to protect your DD.
E., the girls at their ages 7 & 10 can be bossy, manipulative and put pressure on your DD in ways that you don't need to think about.
IF you want to talk further, email me privately.
V.~