Why can't it be, "watapanda basi katika kituo cha basi"?
the sentence itself is erroneous, your sentence is actually the correct version
Could you put "Watapanda basi kituoni cha basi?"
You never use the locative in loan words or expressions with more than one word, as kituo cha basi
Would "watapanda basi na kituo cha basi" be correct also?
That implies that they're boarding both the bus and the bus stop