I would have a serious word with the parents and grandparents of these children. It sounds as though they are teaching this colt, that humans are siblings. You can bet your life, that the first time the colts kicks one of them in the teeth, you will be the one to pay. This will only get worse as the colt grows.
Can you move your horses to a different facility?
Agree'd. You already got great advice on dealing with his behavior issues. But boy oh boy, I would go off the wall if I found 'unauthorized children' playing with my foal!
Not only because they could get seriously injured and YOU will be at fault, but also because they are severely degrading the worth of the animal by encouraging behavioral problems. Your (for example) $5,000 dollar foal is suddenly a $500 foal because he thinks it's okay to bite and rear on people.
Kids think it's cute because he's what, 100-200 pounds? Can you imagine that at 1,200 pounds? Oh my god.
I love to play with my horses, but they understand that rearing and kicking is not okay within 'My Area'. If they take off racing around the pasture, they can do backflips if it tickles their fancy! But within two horse lengths of me, any kind of behavior that could lead to a dangerous situation is strictly forbidden. No biting, no kicking, rearing, bucking, etc.
A lot of horses and youngsters absolutely love to play with 'their people'. My little two year old gelding thinks it's the greatest thing since pelleted grain.
I make a 'scary' noise or posture, and he tries to mimic it. It's hilarious watching him bounce and snort and squeal then stop and look at me all: "DO IT AGAIN! 8D"
The rest of the time however, I expect calm, attentive behavior. No nibbling on the lead rope, no dragging me across the yard for grass, no invading my bubble and running me over, no kicks, no bucks, no nothing.
Playing is a great way to bond with your horse, but at the same time, it has to be done safely for both you AND your equine. What those kids are doing is borderline suicidal.