The oblique case is a case for nouns and pronouns when a postposition is placed after them. बेठे is a plural masculine form of the verb. Theoretically बैठी (feminine plural) needs to use here.
This is my question too. Wouldn't "are sitting" need to be constructed with " रहे हैं " ... I typically think of the रहे हैं as being like the English am/are/is + -ing
The way understand it, even though बैठा is translated as "is sitting", it actually doesn't refer to as a process happening (as in they are in the process of getting themselves seated), it is more of a description. I try to think about it as "they are seated".