Rulesets determine skillsets. Tactics are determined by the "battleground" (read: competition setup).
If a style focuses on competition that doesn't allow foot-sweeps or clinching, and kicks are scored higher and more frequently than face punching, your fighters will end up looking like Olympic TKD: hands at the sides to deflect body kicks, facing sideways to minimize target area on the torso, bouncing up and down to set distance. It works in that venue.
Fix it with sparring
The best remedy for a bad habit is to remove the contrivances that created it. Have them spar, but change the rules:
- Allow foot-sweeps
- Encourage clinching, takedowns, and throws
- Add leg kicks and face punching
These don't have to be done all at once, or all together. MMA sparring is not necessarily required to break the bouncing habit. It is absolutely possible to add these changes piece by piece into their sparring practice. One day you could do all-inclusive striking, but no throws or sweeps. Another day you could do just face punching, clinching, and throwing (without kicks or foot-sweeps). Another day you could do anything-goes san-shou or MMA sparring.
When I did karate, we did compliant drilling of throws, kicking below the belt, and standing joint locks. We talked about the importance of these techniques and their superiority over head kicks all the time. But our sparring rules--light contact "tag" with no leg kicks, no grabbing, no sweeps, no throwing--logically produced high kicks, bouncing, strikes as powerful as feathers, and stances vulnerable to getting knocked or taken down.
Talking about the issue is fine. Correcting their stance or habits in forms or technique practice is good. But these approaches pale in comparison to allowing, in sparring, the techniques that make bouncing such a bad idea.
Once I started sparring with throws, leg kicks, and face punches, the vast majority of my bad habits naturally melted away. I didn't need to be coached not to throw three spinning high kicks in a row, because my partner would knock me down. Nobody had to be reminded to keep their stance grounded, because if they didn't, they got clinched or swept. Good sparring rules are a breeding ground for good technique.
I predict with a few weeks of practice in a broader ruleset, their bouncing will be replaced by the habits common to more inclusive fighting disciplines and to fighting in general.