Confused

My wife has told me she's only staying because of our two kids and would have otherwise left.xdQ I know I haven't been great but we have overall been happy together. At least I thought. So last week she told me that our relationship was over but that she doesn't want a divorce or even me moving out as she doesn't want to hurt the kids. She is telling me to think about this a co-living, like housemates, in separate rooms etc. I hate the idea of not being with the kids so I am minded to accept but a friend is telling me that this would be unfair both to me (as not allowing me to move on despite being told she doesn't want to be with me) and the kids (as essentially they will figure it out and be impacted regardless). Part of me also wants her to change her mind and see staying in the house as a chance to show her who I can be. So I don't know.