I don't think separating them is too odd if they really wanto focus on just one child, maybe get to know that child better w/o the sibling.
My youngest is very different when he doesn't have his older sibs around.
I think the OP said that the kids came home from their grandparents place unhappy bec the grandparents didn't follow a bedtime? That's my guess but I'm not sure. If kids stay up late it'll cause problems with their routine the next day.
I guess you have to decide if the grandparents were really sincere about spanking them.
My parents both hit me & they've advised me to use their philosophy bec it's what worked for them. I said I would not & I didn't want them to do it to my kids. I think they also know how devastated I'd be if they went against my wishes...& not have the privilege of seeing their grandkids again.