Seeing your kids on stage is magic—my son has been in various professional and amateur roles since he was 10. He can act and sing, which opened up musicals too. Having several aspects to performance has definitely helped him. Actor musicians can be in great demand, but since there are few (compared to actor / singer / dancer), I don’t think there are as many opportunities as there might be.

If your kids are ok with the acting side, definitely encourage them.

On a related note, I was also involved in the building of a new theatre at my kids school, and I tried to convince them to not restrict it to the music and drama departments. No matter what field you’re going to go into, being confident in front of an audience (even just presenting on your own subject) is a valuable skill that theatre can teach. I’m now grey enough to not worry about speaking to an audience. I wish I’d had that confidence earlier in my career.