Firstly, I am so very sorry for the changes in your relationship and the breakdown to the model that you have known so far. I understand completely how painful this time is for both of you; especially for you.
I definitely don't believe in 'normal' family models. I think that the most important thing is the children - that they should have a say in what happens. But, I do feel that if they are on board with an 'alternative' situation, it could absolutely work.
If this helps at all.... my girlfriend and her husband have a three year old daughter. I am helping them raise her, as a third parent. It's a controversial topic, but I believe that as long as you listen to the children, it can be perfectly healthy to have an 'unusual' parental setup... whatever that may be.
I have been in a position similar to your wife. I was with my boyfriend for five years, living together, cats, no children, but a life plan and the idea to be together for the rest of our lives. We opened our relationship up so that I could explore my feelings for women and, like your wife, I discovered that I was much more into women in the process.
It may feel that it is easier for your wife... but if she's anything like me... she'll have gone through all kinds of emotions. She'll be torn apart that the life she thought she wanted isn't what she wanted. Her discovery about being gay will be both liberating and completely confusing. If she's anything like I was, she will be feeling unspeakable levels of pain about hurting you.
However... if this helps.... like you and your wife, my ex boyfriend and I are absolute best friends and five years after breaking up, we still live together. We even sleep in the same bed; but do not have a sexual relationship. We are both in other relationships, but this situation is working for us.
Sometimes relationships change, but it doesn't mean that they have to end. I strongly believe that we meet certain pivotal people who teach us things... it doesn't mean that when the lesson ends, the attachment has to dissolve.
Make your own rules in life.
Your wife's new relationship won't necessarily allow her an escape. Sometimes it can create even more stress... especially if she's only known this woman for a month? If she's anything like me, she might actually want to start preparing herself for a freak out.... the concept of living a new, liberated, lesbian life is wonderful... the reality can be dealing with a new, insecure, young, uncertain relationship whilst dealing with the grief of ending your rooted, secure, aged, steady relationship. It took me six months to leave my boyfriend for this girl... and another six months to commit and settle in that relationship.... it may not be as easy for her as it seems right now.
If you do stay in a non-romantic relationship, which could be very likely, at least for the foreseeable future... then it's time to think about the complications...
Potential complications could be... having other lovers over. It might be better for your own hearts, and the eyes of your children, to visit future partners outside of the house. I'm sure that the last thing you want is to watch your wife with her girlfriend, in your house - and in my opinion, there'e nothing wrong with feeling that way, if you do.
There's also the issue of love and confused feelings. You have to be sure that you won't hang onto her for years, hoping that her relationship with this other girl will end and that she'll come back to you. If you feel you can move on, whilst still being in close proximity, then it is definitely worth a try. It might be something that you can't know until you experience it.
I think overall, this is something that will take time. If you and your wife decide that you would like to try to continue living together... then you need to talk about what to tell your children, since they are old enough to have some sort of understanding. Of course, you could always go with the option of pretending you're still together... but I know that when I was a child and my dad had 'friends'... I always knew they were girlfriends. Kids tend to see through things and are pretty insightful.
Whatever you decide... I hope you can agree on a way forward together... and don't feel the need to listen to societal norms; only each other and your children.
Good luck and all the best to you.
Me: (30f) open poly
GF: (40f) My long-term, long-distance partner
Hubby (37m): GF's husband
Garcon (26m): GF's submissive/third partner
“Peace comes from within. Do not seek it without." ~ Buddha