Families Flying Together Act really did not get very far -- the FAA Bill of 2016 said Transportation Secretary shall review and if appropriate establish policy -- as far as I know no policy has ever been written.
From the DOT:
If you are interested in sitting next to members of your family, make sure the ticket that you are purchasing allows you to reserve specific seats on your flight. - For example, basic economy class tickets are often lower priced tickets that may not provide consumers with the ability to select a seat. These tickets may not meet the needs of families with young children.
https://www.transportation.gov/indiv...family-seating
This has been discussed on flyertalk -- two threads --
Law requiring WN to have parents sit with kids?
Status of law to ban separation of children on US flights?
Short answer, no the airline was not violating the law. And if the tickets were Basic Economy the DOT does point out that these tickets may not be appropriate for families with young children.