No, absolutely not, for so many reasons. It's hard enough for an adult to witness someone they love in pain and/or distress - and they understand what is happening. Even the easiest and smoothest birth is not going to be effortless and pain free. And there is always the possibility - however remote - that something could go wrong, then you have an emergency situation with the ensuing drama and panic. Lots of blood too - which would terrify a small child. From the mother's POV I think it's a terrible idea too - if the older child was upset it would be heart-breaking for the Mum not to be able to do anything to really reassure them. And, in labour you want to be able to do whatever feels right for you - scream, shout, groan, swear: not be putting on a stoical show for a young child. I was at home up until an hour before I gave birth to ds2 - with ds1 pottering around - and it was hard putting on a brave face when the contractions hit.
I can't see that it could be anything but traumatic for a small child - I wouldn't even want them in the house if it could be avoided - I'd want them safe and looked after somewhere else.