The JW world is up there with the most bizarre bubbles of self-deception. In the bubble, one's cognition is heavily warped and everything around becomes make-believe as rational thinking is buried away, under layers of sham teachings and dubious accolades from fellow JWs. I suppose that is what the experts might describe as "cult mentality".
I knew quite a few brothers and sisters whose family lives ran like a badly scripted horror movie. Yet, these ones turned their back on pressing family issues or, in some cases, "sacrificed" family members just to be seen as "putting Jehovah first". Nice job !
When I look back at all the pretty sisters and handsome brothers, now old and "past it", who never got hitched because they were either looking for a non-existent super-spiritual partner or simply because Armageddon was "just around the corner", I feel nothing but genuine sadness for all those people who I now view as victims of a subculture of self-glorification and dubious peer endorsement, a good number of them egged on by deluded JW parents and relatives whose primary concern was self-image in the congregation. Some of these 40-something year-old brothers and sisters have found new roles as carers for their elderly JW parents who played a major role in "herding" them into this rather miserable corner of life. And the Watchtower society comes out as the winner !
Seems to me like your unbaptised nephew and niece are smarter than you appear to give them credit for. They have their parents and the JW organisation well sussed and they're playing them at their game. After all, hasn't the Watchtower society learned to eat and yet have its cake ? Why shouldn't your nephew and niece do the same ? They have never been baptised, so they get away with all sorts and dad's position and privileges in the congregation remain unthreatened. Sounds like a deal all parties should be happy with !
And as to the inference about the nephew and niece fleecing the state, well, what can one say, really ? Donal Trump, today, prides himself as being smart for successfully evading taxes for 18 years ! It seems to me that same system which allowed Trump to get away with tax evasion also makes it possible for your nephew and niece to support their rather relaxed lifestyle with recourse to state funds. I do not support tax evasion nor do I support a "creaming" of state funds, but if your nephew and niece have done so, legally, what can you and I say ?