Offspring shouldn’t remain with the parents once they are weaned. Most of the time the parents actually start picking on the young, because it is their instinct to make them leave and be independent. This is nature’s way of preventing inbreeding. If they are allowed to stay, then when old enough, the parents are likely to try to mate with them, and of course you can’t allow related birds to breed. Also, they will soon be identical to the parents, and then you won’t know which bird is which – we get emails all the time from owners wanting to know how to tell the offspring from the parents. So you do need to separate them. Even if you do not have nests, they will mate and lay eggs, so you have to be willing to discard any eggs. You actually should not have nests in there, not only because of having related birds together, but because you can only have one pair in a cage when you are breeding them. They only need a nest for breeding – they do not need a nest for a bed. They would not sleep in a nest in the wild except during breeding season. As for the bully, are both chicks the same sex? Either the bully wants the other bird to go away, or he is trying to mate with it and the other bird is rejecting him. I would separate them, and definitely if they are opposite sex. While he isn’t drawing blood, this happens a lot in Zebra finches and the picked on one will end up bald and constantly being picked on. Ideally you can find separate homes for each bird.
Thank you for asking Lafeber,