Yikes! It's really hard to predict how this will affect kids, but having stability and a routine is super important for children. I would think it would be better on the children to not switch daily and maybe switch weekly. Why can't the parents switch off weekends and maybe have the children go to an extended family member one time per month? Do the parents want every weekend off from parenting? Parenting doesn't work that way.

The parents should really take a parenting class and seek family therapy to learn to navigate maintaining focus on the welfare of the children, even though they are no longer together. Also to help the kids understand their schedule they should have a simple calendar with the days they will be with which parent or family member. That way they understand their is a schedule but that the other parent is coming back for them.