If they are eligible to be claimed as a dependent, whether or not they are claimed as a dependent, they cannot claim themselves.

Whether parents get a tax benefit is irrelevant.

"Is claimed as a dependent" isn't a test for whether Kiddie Tax applies anymore.

I think because they are FT students under age 24 with more than $2200 of unearned income and earned income that was less than half of their support they are subject to kiddie tax correct?

What if they are not FT students or not under age 24 with more than $2200 of unearned income and earned income that was less than half of their support?  Are they still subject to kiddie tax?

The answers to your questions can all be found in the Form 8615 instructions.