Couldnt it be: "Are they outside or inside"? Or is that the same as below, and inside or outside would have been accepted?
"Fora da casa" or "dentro da casa", for example, would usually be translated into English using "outside" and "inside". If the target phrase is only using "in" or "out" in the sense of being accepted as part of a clique, that's just bad teaching design,
It can be "in the game", "out of the game". Dentro and fora accepts "not locational" ideas as well.
If you would want to translate inside and outside strictly, you would say "do lado de dentro" and "do lado de fora", but just "dentro" and "fora" are accepted with that meaning.
Once again, I do not understand why my answer is wrong, Are they outside or inside?, it is the literal translation from Portuguese, sometimes you require literal translations, and sometimes, all of a sudden, you change the rules, I simply do not understand it.