JOEL - The sealing of the child is still in effect to her biological father and mother. According to church policy, living children who are born in the covenant or have already been sealed to parents cannot be sealed to any other parents. They remain sealed to the biological parents even if the sealing of the parents is later canceled or revoked by the excommunication or name removal of either parent.
However, just because the children are still sealed to the excommunicated father does not mean that they will be with him in the next life if he does not repent. What is most important in the sealing ordinance are the blessings that the child receives by being sealed. Actually, children are not really sealed to a specific set of parents but they are sealed into the patriarchal order of families. We will all be one big happy family together in the Celestial kingdom.
So if you think about it, the most important person we will end up with in the Celestial Kingdom (if we make it there) will be our own spouse. And we hope our parents and children will be there as well with their own spouses.