Louis "the Bavarian" took it upon himself to declare Margarete's marriage to John-Henry null and void. William of Ockham and Marsilius of Padua defended this "first civil marriage" of the Middle Ages. The new Avignon Pope, Clement VI, however, excommunicated both Margarete and her new husband in 1342. The scandal spread across Europe. In 1359, due in large part to the influence of the new connections provided by the marriage of her son by Louis, Meinhard III von Wittelsbach, to Margaret of Austria, the youngest daughter of Albert II von Habsburg, in 1358, Margarete and her second husband were absolved from the excommunication by a new Pope, Innocent VI. The annals and historians in Germany and Italy (Florence, Milan, Padua, Monza) make reference to these events. In ecclesiastical propaganda of the day she received the nickname "Maultasch" (literally "bag mouth"), which means "whore" or "ugly woman".
After the death of her husband, Louis, in 1361, her son, Meinhard, became the Count of the Tyrol. However, Meinhard died less than two years later, in the year 1363, without heirs and just under a month away from the age of twenty-one, precipitating an invasion by Louis' younger full-brother, Stephen von Wittelsbach, a duke of parts of Bavaria (Lower Bavaria-Landshut and Upper Bavaria). Stephen, allied with Bernabò Visconti, occupied Tyrol until the Peace of Schärding, the financial compensation for which was exigent upon Margarete's death. Margarete was then induced to contract the County over to her late son's brother-in-law, the Duke of Austria (and self-proclaimedArchduke), Rudolph IV von Habsburg, who eventually united it with the "dominion of Austria".