Here is my take on the effect my partners transition will have on our children; In the short term they will potentially get teased. They may have unpleasant encounters with bigots. We regularly talk to them about how to handle, in a positive manner, negativity thrown their way.
In the long term, though, they will gain much. They will learn to defend themselves and what they believe in. They will learn to be open minded, open hearted, accepting individuals with the ability to stand up in the face of adversity. Who could ask for a better skill set for their children?