It's not really but the "mi" on the end is REALLY subtle, I had to hold my phone up to my ear to hear it, as I initially thought the same thing.
Strange. It works for me. Try:
This is a negative so surely should be genitive case not instrumental, so dzieci?
You made one of the most typical mistakes that our learners do - don't worry, it still happens a lot.
Basically, people are taking the rule too far and assume that there is such rule as "negation = Genitive". There is no such rule. The rule is actually "negated Accusative = Genitive". And as Accusative is the most common case, and also as some comments (including some of my older comments, probably) aren't specific enough, people assume that it's for all negations. But it's not. Only Accusative changes case when negated, everything else stays the same.
The slow version is better but I thought I heard four words (splitting the second and third).
The audio on this does not sound like the word. Is the last syllable in the last word pronounced with a "chew" sound? Really?
If you hold the speaker close to your ear, you can hear dziećmi. The -mi is a little muffled
I do not understand why the instrumental case is used here. Can anyone please explain?
In other words, the object after the verb jestem/jesteś/jest/jesteśmy/ jesteście/są ("am/is/are") takes the instrumental case, except after to jest/to są object stays in nominative - a simpler explanation