The reason that children are playing in this hospital is that the society wants to make the children think that death is no big deal.
One of the major goals of the society is take away all human emotion. This will basically make people be placid and content all the time. One of the ways that they do this is by making it seem as if death is nothing special -- nothing important.
One way to do that is to have things like what happens when Linda dies. You have kids brought in to play around gying people and get treats when they die. This makes them equate other people dying with fun and treats so they don't really care when it happens.