Hi,
Although it blows out your workload in the short term, maybe CA PAM would be a way to handle this. As I understand it, it is far easier to write conditional code checks here, than to try and do so within SDM. Sorry that I don't have any specifics on how to do this, just the idea that it may be a better fit.
Note that it isn't an oversight that the Close All Children does not close out open Workflow Tasks. This is a check to prevent tickets from being closed accidentally. See here for some similar advice:
Bypassing Status transitions when closing all chil - CA Knowledge
You could log an Idea here in CA Communities for this behaviour to have an option to change it.
Otherwise, you've got a bit of work ahead of you - as I see you've noticed. Although that specific ServiceDeskUsers thread is not at that link, if you enter general terms such as "servicedeskusers Propagate_Status_to_Children" into a web search, you'll come up to other links that reference it and which have additional information. (Warning - it gets horrid fast.) You may even be lucky to come across a Google Cache page to the original, although I haven't tried that.
Eg: Resolved: Problem developing customization to set child solutions - Customizations / Modifications - ServiceDeskUsers
The other reason that it may be worth investing the time into the CA PAM development, is that you're more likely to get a solution that will be robust between versions of SDM. Looking at those ServiceDeskUser posts, I see phrases such as "This used to work, but . . ." which is not uncommon with custom SPL code.
Sorry that I don't have better or more technical news.
Also note that you may hit limits around 500 if attempting to close a lot of child tickets.
Does any site have experience with closing out Children with open Workflow Tasks?
Thanks, Kyle_R.