That's actually very interesting to know. I have heard of those that take on the Japanese family name to decrease chances of discrimination (sounds somewhat naive to me tho). Which makes me wonder, would it also be possible for the children to adopt their mother's family name instead of their father's family name?.
In my friends case, when he renounced his citizenship, he also changed his last name to hers. therefore his family name became hers. Again I don't know all the details of how his parents reacted to this, as I didn't know them, but I was certainly aware that many of his military buds were pretty upset (not that their opinion mattered one bit in the situation).
As far as discrimination is concerned, my friend is about as whitebread american as one can get. With the exception of a Japanese last name and fairly good Japanese (we were both in a linguist batallion) there would be no way to mistake him for Japanese. None whatsoever.
Unfortunately when he relocated to Japan, we lost contact as he never left a forwarding address, so I can't tell you exactly how he is doing either.
I do miss his family, especially his kids. they were bilingual from day one and it was always funny when they would mix English and Japanese in a sentence and not ever realise it.
They would speak japanese to his wife and English to him. they would reply in Tapanese to anyone speaking Japanese and English to anyone speaking English. But, when those of us who would speak both Japanese and English would come over, the kids would sort of lose their ability to descern between English and Japanese and would speak a sort of Japanglish that was cute as hell.