Upvote:0
As far as anatta
vs tulku
, I answered this three times already: here, here and here.
As far as benefits, the idea is to have these children be raised by Enlightened masters from the very beginning. This way the entirety of the teaching, with all its subtleties is passed on from generation to generation. These people then serve as hubs, spreading the Dharma to regular people, and as "vision holders" (vidyadhara) that can pass the Dharma to the next generation.
Upvote:2
Let's be clear on the meaning of the teaching of Anatta. All schools, both the Theravada school and Mahayana forms of Buddhism teach that there are two kinds of truth, conventional and ultimate. The teaching that there is no self is a teaching that applies on the ultimate level only, so on the conventional level there is a self.
In other words, even though on the ultimate level all you have is a collection of mental and physical phenomena rapidly arising and ceasing without any kind of core or permanent substrate, it still makes sense to point to point to such a particular collection and call it "Joe" for example, because there is causal continuity between these phenomena. One individuals life will affect their next life of course, with much of their qualities rolling over into the next one, so even we Theravadins have to admit that finding the rebirth of our teachers makes sense.
(Added latter)
The reason why it would make sense to find their rebirth (assuming that their rebirth would be human and that you could find them which is the only real objection in my opinion from a Theravada perspective) is that because their qualities developed in their previous life carry over, they would probably be more spiritually developed from the beginning than someone who was not the rebirth of an advanced practitioner.