Yes, the dog is stressed and is throwing off calming signals like crazy - can't say if the stress is from being just a generally anxious dog, or if it is because he has been trained with heavy compulsion in the down/stay, or because the kids are allowed to jump on the dog and maul the dog, and the dog has been punished for reacting to the kids - could be a number of reasons.
From this video, I can't tell what the dog's base temperament is like, or what the poster means when he says the dog is protection trained. The dog looks very young still - like maybe a year old? What I see is a young dog asked to do something that makes him stressed (hold the down) - either because of the training he received associated the command with stress, or the unpredictable nature of the kids is causing him stress (I think both factors are at play here).
This is not a video that I would be posting on you tube and bragging about how solid my dog is.