Hi, we are planning a home remodel. Currently we have 2 kids' bedrooms upstairs, 10'x11' and 11.5'x13.5'. Next to the smaller room is a bonus alcove (we had divided a huge 11x26' bedroom) - see drawing of existing small bedroom and alcove (labeled as "office" but we never set it up as one).

We have 2 options:
(I) convert the alcove space into a full bedroom (11.5'x11.5') with door and closet, and use the smallest room as a second guest room/play room. See proposed drawing.

(II) remove the dividing wall and go back to the original 11'x26' bedroom. Potentially have my 2 boys (2.5 and 4.5) share in the future.

I like having an additional bedroom, which I think adds value. Spouse thinks a monster kids room would be cool. If the kids dont share, I think it is unfair for one to have such a huge room (which also happens to be larger than the master bedroom).

What would you do? We plan to stay in the house until we retire.