Living in a very rural area this was totally normal. The next primary was 5 miles away the next secondary 8 or 10.
DFs of mine had both Mum and Dad teaching at the primary. I think the younger sister had mum as her reception teacher and dad as HT (he was deputy while I was there). It obviously didn't put her off school as she is a primary teacher too 
My senior school year had two science teachers sons, the geography masters son and the director of education's for the counties DD. The deputy HT' s DD was in the year above.
We never teased any of them and in fact we felt a bit sorry for the physical masters son because his DF was a bit grumpy.
Every O level lesson went - Tell off 'Fred', tell off CD, tell off Star.
Non of us actually had to do anything wrong. Fred had annoyed him in the past, DS was his DS and I was a girl. He could only cope with sweet, quiet obedient girls 
The only time I've heard anything against teachers and their DC' s is my dear, but, twitchy friend complaining about favouritism in play parts etc. for the teachers DD.
(Trouble was teachers DD was good and could learn lines, she did something out of school with DD2)