This is the latest trend in marital separations where both parents work out what is best for the children. The Australian Institute of Family studies have done long term longitudinal studies on divorced families and have shown that children function better in 2 separate happy homes than the one dysfunctional one where there is either open conflict or silent passive aggression.
Children are sensitive and intuitive and know what is going on. Parents cannot hide what is under the surface as the children just know. Sure, there is a period of instability where the children feel the emotional roller coaster of any separation. However, this can be minimised by both parties working for the betterment of the children and avoiding using them as a lever to get at the other party.
It took my son at 13 six months to get over my separation and he is now very settled and contented young man doing extremely well in school and life. During the six months, he went through a phase of being angry with me. This is a natural sequence of events and he got over it in time.
I know of husband & wife who have worked out living separate lives under the same roof while the children are young as part of the co-parenting arrangement. Their children know about the situation, understand and are happy that both parents are still in the same house, sleeping in separate rooms.