
Hi Alli,
No offence, but from the info on your post I wouldn't advise taking on an adult dog that has "nipped" kids previously - if her previous owners were concerned enough to return her to the breeder when she lived with them as a family pet for 2 years it sounds a high risk situation to me for her to be re-homed in another family environment.
Although you have been advised that no skin was broken how can you be sure that is genuinely the case? I cannot envisage a situation where I could safely have such a dog around ANY children - however responsible and dog aware they are. She is not a puppy anymore, play biting and nipping are no goes with adult dogs - they should have been trained out of her long ago!
You haven't mentioned any proof on the the severity of the dog's reactions and nor do you seem to have accurate facts about why she did react that way (ie. being teased, frightened, hurt etc). Even if she was being GENUINELY mistreated by the children, this may only have served to make her distrustful of ALL children now. :-(
You may know more details than you've had time to write on but I can only give an opinion on what you've said so far - so if I'm off on the wrong tangent forgive me ;-)
Had I bred this bitch and had her returned to me, regardless of how well behaved she appeared, I would definitely NOT offer her to anyone with children, even including an older couple with visiting grand children etc. If there's one sure thing about kids it's that they have other kids as friends and of course sometimes the younger siblings of their friends will be hanging around too. There are just too many unpredictable situations in this sort of scenario and not only your own girls behaviour but every child who has even the tiniest opportunity of meeting the dog too throws up a potential problem and the dog (from your above info) is IMO an unknown quantity :-(
Another thing, as you probably know, any dogs regardless of breed which have a separate "working strain" have different requirements of expertise to suit their temperaments and their instinctive working characteristics. I don't pretend to know anything about working cockers' temperaments but for eg. look how often there are disasters with "farm bred" (ie working, not puppy farmed :-) ) border collies proving to be unmanageable in a "pet" home simply because they have decades of breeding behind them to bring out the traits need to work sheep, stimulate their highly active minds and run countless miles a day - but they get none of those "life essentials" in the *average* family home - certainly not to the same extent as they would with say an obedience/agility/flyball enthusiasts ownership :-(
Sorry to ramble on and on. I just think this is not the right dog for a family environment and hope the breeder takes the decision out of your hands and finds a working type home for her instead.
HTH. Good luck, :-)
Kind regards, Teri