Just some more thoughts now that I'm not just firing stuff off really quickly...if this is misdirected herding behavior, it's very likely that it's not something you're going to have to worry about for the lifetime of the dog, but only until your kids get old enough. It sounds like all the kids the dog has gone after are under 5? Young kids have high voices, lots of shrieking, laughing, fast movements, running...all things that make a herding dog want to herd! As they get older, the dog may not find them quite so enticing.
However I also missed that the dog has gone after two adult men. Another breed tendency is a strong sense of territory, and a tendency to not like "intruders." Again, this is a failure of training on your sister's part. ACDs need to be really carefully socialized from a young age to teach them that it is okay when people come over. Look at all the problems people have socializing GSDs as posted on this forum...and I can say with confidence that in my experience the average pet ACD is a lot worse than the average pet GSD in this category (and I'm not just talking about my charming Hector).
Part of the problem is that, at least in the US, there aren't really "pet" lines in heelers that I'm aware of. They're all working animals. Even the show lines generally maintain a great deal of working ability, and the difficult temperament that goes with it. Many people are not prepared for that.
The good news is that this all can probably be fixed if your sister gets serious about it. The dog may never be trustworthy around young kids, as many aren't, but if the kids are just visiting and your sister takes your concerns seriously by ensuring that the dog and children are kept separated, it isn't the end of the world. You say that you think that dealing with this for the lifetime of the dog sounds like too much work, but that's kind of up to your sister--I don't see how her decision to have to confine the dog during visits from children is any more work for you. FWIW, one of my dogs isn't trustworthy around kids and I routinely confine him when nieces/nephews/friends with kids visit, and it's really not a big deal at all. He's happier, everyone's safe, and life is good. We've even had kids stay for a week and I just made sure to give him plenty of exercise and attention separately, and life was good.
The biting adults is more serious to me, as it is unlikely (but not impossible) that it is herding behavior, based on what you've said. That may be aggression or fear reactivity and needs to be dealt with before it escalates.
Your sister needs to find a trainer who is experienced with these problems (if hers isn't) and get her butt in gear to fix them, in addition to giving the dog a job like I said (it can be anything from treibball to trick training to serious games of fetch to agility, as long as the dog gets plenty of mental and physical stimulation every day). It's only if your sister is unwilling to do that work that I'd recommend rehoming the dog right off the bat. And FWIW, I do agree with the poster above me that it would be more concerning if the trainer was saying that she could guarantee that the dog would be safe around kids, because some dogs just aren't. I mean, I've trained my bad-with-kids dog not to react immediately to kids if they, say, unexpectedly run up to us on a walk, but he's visibly uncomfortable in close quarters with them and it would be unfair to expect him to tolerate that. It's just like people, some adults hate kids too and you're not going to change that by forcing them to put up with them indefinitely.
Let me know if you have any questions I can help you with. Because I've done rescue with the breed, I could also probably advise on some trainers or breed-specific resources as long as you're in the US, just let me know. I'll check this thread or you can PM me too.