a participant dies and his 4 kids are the beneficiaries. three of them elect to leave their money in the plan. question is- are these 3 considered participants? if so, they should complete beneficiary forms. if so, must they name their spouses as beneficiaries?

Not sure that they are required to complete beneficiary forms or not. I don't believe that they would have to, or rather if they did not and were to later die (as they obviously will) then the proceeds would accrue to their estate automatically in the absense of an election form.

Not so sure about that. What does the plan say? It is usually a good idea to have an affirmative beneficiary designation rather than using "the estate" as the default. Notice that the employee had such a designation (4 kids).