While we can't tell you which way is the correct way to file, I can show you where the box is to let ProConnect know that you have a nonresident alien spouse when using the Married Filing Separate filing status.  It is located under General ---> Misc. Info/Direct Deposit ---> Miscellaneous screen and then scroll down until you see the box highlighted in the attached screenshot. 

Also, if the children have pending ITINS, you can use option #4 under the Child Tax Credit dropdown on the dependent screen to indicate that.  That option can't be used for pending Social Security Numbers.

If you need further assistance, please give us a call at ProConnect support.