Well, I think you've explained the "why" -- he's trying to get them to play. But that sounds like behavior that you should nip in the bud. (Sorry for the bad joke -- couldn't resist). You especially don't want the dog to be nipping at children. It's one thing if dogs nip other dogs when they are already playing, but it sounds like he's nipping before the other side has agreed to play, which seems like a no-no to me.