The Sound Blaster 16 only has one (buggy) MPU-401 UART interface, so it can only do one MIDI output at a time. That output is however routed to both the wavetable header and to the external MIDI port. Both will receive the same MIDI input from the card at the same time.
The challenge is that the devices both use MIDI MPU-401 signalling, but they don't speak the same language over it. XG50 uses General MIDI, MT-32 has a proprietary pre-GM soundmap it shares (more or less) with Roland CM-32 and LAPC-I. So you need to tell your source (game) which to use. If you choose MT-32/CM-32/LAPC-I, the MT-32 gets correct sounds and the XG50 sounds awful. If you choose GM, the XG50 gets correct sounds and the MT-32 sounds awful. Given that both MT-32 and GM are used for music, I'm not aware of any games that allow separate GM and MT-32 output at the same time, and that would require two interfaces.
That MDR-401x you have would give you the second interface. More importantly, it would give you intelligent mode support, which a lot of MT-32 titles require. Later games work fine with MPU-401 UART, but even there, the SB16 has buggy UART leading to hanging notes and slowdowns when playing high-quality digital audio and MIDI music at the same time. So I'd strongly recommend getting the MDR-401x working in any case. It will need a base address and an IRQ. Given you aren't sure about IRQs, I suspect your problems are due to an IRQ conflict between the MDR-401x and the SB16.
There's a topic on the MDR-401x here:
MDR-401 cards - are they really existed or are they an elaborate hoax?
But regardless on that discussion, this is probably just down to figuring out free resources. Do you have documentation on what the four switches on the MDR-401x do? If so, please post here. If not, some trial and error is in order. Four switches mean 16 options, most likely 2 for IRQ (4 options) and 2 for base address (4 options).
