Perhaps I am not fully aware of how one can acquire PTSD and which situations can induce it, but - while I agree there are definitely certain situations where observing a death could be extremely emotionally trying - it doesn't seem extremely likely that being present in a controlled hospital situation while someone dies is going to cause PTSD. I'm only excerpting from Wikipedia here so this doesn't mean that much, but:

Most people having experienced a traumatizing event will not develop PTSD.[2] Women are more likely to experience higher impact events, and are also more likely to develop PTSD than men.[3] Children are less likely to experience PTSD after trauma than adults, especially if they are under ten years of age

I mean, it's death. It's a natural part of life. It's not pretty but everyone is going to experience it, and probably more than once through their lifetime; I don't subscribe to a "think of the innocent children!" mentality where it's better to protect a child from reality because of their youth.

Like I said there are situations which I think could be more borderline, for instance if a person is hit by a car and is suffering grievous physical injuries, or a person who had suffered burns over the majority of their body and is dying from that. However, especially in the first situation, I'm pretty sure you're not going to have a lot of time to assemble a death watch in the first place.

You know how ignorance is resolved? Exposure.

Do you not think that being unable to say a final goodbye to your brother or mother as they were dying could not also potentially result in unpredictable trauma and potential resentment against the family members who prevented a child from being there? And, the question that my opinion hinges upon for most of this discussion: Are you willing to be that person that tells a child they are not allowed to say goodbye?