I snuggle with my 6yo grandson when he's going to bed on those evenings when I've spent the whole day with him, whether at his house or mine. When he's overnighting with us, he likes to jump into bed with me and his grandpa when he wakes early in the morning. He's not dependent on it, but we all love it.
I've told him a few times that he can end this tradition if he ever feels uncomfortable with it or would rather just read himself to sleep. So far, he loves it and shows no need for additional privacy. That will come, I'm sure. I doubt very much that I'll still snuggle him to sleep when he's ten.
But if he were a girl, I don't think I'd hesitate until she said stop. My daughter would sometimes snuggle with me until she was well into adolescence. She progressed normally into a strong and independent young woman.
So, it doesn't seem strange to me at all. But one of the markers of emotionally healthy family life is that all people's needs are honored in the best balance possible. And one of the markers for the need for more privacy, less nudity, etc., is that either the child OR the adult becomes uncomfortable with it. It doesn't matter which party – once that discomfort sets in, more privacy should be instituted as family policy.
So if YOU are uncomfortable having the children in bed with you, then your wife should probably plan on sleeping with them in the guest room on nights they spend at your house. At some point, one or both kids will probably express a desire to sleep alone.