I taught both my DC. I am the Reception teacher of a one-form entry school, so I was their very first teacher. Like you, I chose my school rather than their catchment school, because of its excellent reputation and it just made sense for our family.
I have no regrets teaching my own children. Actually, I found it fascinating! My DD (now Y8) was always very lively and a bit of a know-it-all at home, was so quiet and conscientious at school, she rarely put her hand up even when I knew she knew the answer. My DS (now just finished at OUR school and going into Y7) was very quiet at home, however in class turned into the class-clown and just wanted to amuse everyone... I certainly did not see that one coming! So when parents say "They are not like that at home.." I can now empathise!
It worked out brilliantly for our family. I never missed an assembly, sports day or other special moment. When I had a staff meeting after school, an ex-pupil (a 6th form girl) would pick them up and take them back to her house to baby-sit for 90 minutes. This went on until she went to univ, then her friend took over for the next 2 years.
My HT was absolutely fine with me teaching my own DC. However, he did write to me before my DD started to say, in his experience, teachers tend not to favour their own children, on the contrary they go out of their way not to show favouritism. He reminded me that my DD needs to be 'star of the week' if she deserves it, just like any other child.
The parents were always lovely about me teaching my own children. Most were new parents to the school and they just accepted it. Both my DC were reprimanded or praised, just like any other child.
Good luck in whatever decision you make. I have no regrets and really enjoyed being such an integral part of my DC education. It was certainly a special time for all of us.