No, this is totally not how it was. People used to speak quite freely at home (aside from when Stalin was in power, and even then).
First, you need to make sure your children understand the magnitude of danger from repeating what they heard at home. That requires some maturity and intelligence, but more importantly the idea that "there are important truths that you can get punished for saying in a wrong place" is itself one of those important truths that you can get punished for saying in a wrong place, so you either need to approach this very very carefully or take a risk and hope for the best.
Yes, some jokes were okay, especially the toothless ones. Like, making a joke about being poorer or having worse quality of products than the West was relatively safer than making a joke about party members killing each other or hurting random people.
It also depended on who could hear you, and what kind of a job your parents had. The better job, the greater risk of losing your job for saying wrong stuff.
Also, "speak quite freely at home" is more than just jokes. I am pretty sure most people would not feel safe discussing The Gulag Archipelago at home.
I am sure there were kitchen conversations even under Stalin, but to far less extent -- most conversationists ended up in some unpleasant places.
Will you tell us next that Holocaust is just some Zionist propaganda?
Also, it obviously matters what it is you're saying. Most people just told jokes about the communist regime and talked about how shitty life was. Nobody cared about that as long as they kept it private.
And why would they (the KGB) have cared (about jokes)? The venting of steam, instead of letting it build up and affect change, would have to be invented if people didn't do it voluntarily. That kind of self-deprecating humour is all over our media these days, too, we love to bring up important subjects to channel them into harmless stuff, just because we can't pretend it's not there, but also not allow ourselves to actually see it and be serious in its presence.
But some assume that the absence of free speech means that everyone is either brainwashed or so terrified they are afraid to speak their minds at home. I just had to point out this is not how it was in the late USSR.