I used to have my offic in the living room, but as soon as our son could walk IIRC, we moved the office. Office is now separate but reachable for the kids. But the separation is better for my concentration. What was my office in the living room is now the play area, filled with drawing, Lego, cars, and what-have-you.
WFH with small kids is perfect. No commute so I gain an hour a day. When I feel it's been enough work for the day, I'm cooking dinner 10 seconds later. If the kids wake up late, fine, I'll drop you off at daycare later after I did a bit of work. It's 5 minutes on the electric cargo bike anyways.
I don't think I could ever go back.