The text is mistaken. The pronoun should be les.
In the text, the dative pronoun le is the indirect object, and anticipates the full indirect object, a los niños. This (showing the IO through a pronoun and then a full nominal phrase) is extremely common, and it's grammatically correct. What is not correct is, as you've guessed, that le is singular but the full indirect object is plural.
This mistake (failing to make the indirect object pronoun and full phrase agree in number) is also very common, to the point of being present in textbooks and reference works. It's so common that I, being a native speaker, found nothing wrong with the sentence at first sight, and had to check whether it was really a mistake, because it sounded so natural I thought it just couldn't be.
It's possible that people tend to use le instead of les because the fact that it's often not right next to the plural phrase it refers to makes the speaker forget the agreement, and also because le is automatically associated with se, which has no plural. The former reason sounds implausible to me, since I (and many people I know) constantly utter sentences where le is immediately followed by an indirect object phrase, without registering the mistake:
Dale a los niños un beso.
Finally, this is not an instance of a "funny dative"; it's just a plain indirect object, used with the most frequent of the ditransitive verbs, dar, here in the singular imperative (da).