I believe there could be several answers as to why some expat parents don't require or encourage their children to learn Cantonese or Mandarin. They may not expect to live here for a long time, or, esp. if the children attend an English medium-of-instruction school, they may reason that it's not worth the effort, since most of the child's time will be at school, at play with school or neighborhood friends, or at home. If the family lives where there is a large concentration of expats, they may actually have hardly any interaction at all with 90% of Hong Kong's residents! Another factor, which is unfortunate, is some people may regard it as declasse to be conversant in the local language. Even some Chinese people who have lived overseas come back and have this attitude, which seems strange since it is demeaning to local people, but then a colony can leave some complexes on the colonized.
As for the effect on the children, basically they are "stuck" with the same limited knowledge and understanding as their parents.
On the other hand, I believe that encouraging children to learn Cantonese would contribute to making the children's stay in Hong Kong far more stimulating and pleasant, and add to the value of their children having lived here (once they go back to their home countries). Overcoming the language barrier would contribute greatly to also overcoming negative stereotypes about "the locals", and prevent misunderstandings that inevitably will occur between expats and Chinese they encounter. These are good motivations, if you need any, to teach children Cantonese while living in Hong Kong. Moreover, an important point: it is nearly effortless for very young children, and still less effort for older children than for adults, to learn a foreign language, in the country where it's spoken. Once begun, there are endless opportunities for the children to practice the Cantonese they've begun learning. But the thing to start with is the determination to learn the language.
