Even without martial arts it's healthy to let kids rough house, scrap and fight.

It's developmental, very mammal engages in rough play and wrestling when they are young.

It's not just for coordination, or strength, or managing risk. A big part of it is learning to control force- how hard can I play with this person?

If it turns into bullying, that's another matter. Watch it and be prepared to step in (that happens with other species too).

Just don't deprive your kids of this vital developmental tool.