Ivory is elephant tusk, and people in the past didn't always distinguish between tusks, bones, and teeth.

Looks like Google Translate disagrees with you: https://translate.google.com/#auto/en/Elfen%20%0Abein%20%0Ak...

Elven leg coast. I guess this is why I've been told off by German speakers in the past for deconstructing words like that.

Yes, you shouldn't do this. ;) In this case "Bein" (or in the long form "Gebein") is an outdated term for bone or skeleton.

"Elfenbein" is the modern word for ivory. The meaning of Elf is somewhat similar (though not identical) to English and therefore refers to the perceived beauty of ivory.

A tusk on the other hand is called "Stoßzahn" recognizing it as a tooth ("Zahn").

My German is not so great but bein means both leg and bone. I know that much. I just wasn't sure about the "elfen" part. So glad to see someone else provide some info on that bit.

FYI: Google translate is not the most reliable translator.