ESH. Your brother shouldn't be making that ridiculous ultimatum. But you could be doing more than just standing by and watching. Ella and Clara are being childish about "granting titles" and I'd love to hear them eventually explain to their little kids the complexity of why they have to call certain people by their first names when they are in the same family.

These kids were more or less in the same household for at least some years if your brother and his wife have been married 8 years. Losing a parent when you're a child is hard and no kid enjoys the surviving parent getting remarried. But carrying that over into adult life with no other reason to exclude people---unkind and guaranteed to degrade all the relationships.