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Unless explicitly told otherwise by IRCC, the old visa remains valid and may be used in combination with a new passport.
However, depending on the reason for the refusal, there may be a risk of being refused entry at the border. Admissibility of a foreign national can always be reassessed when they seek to enter Canada, despite having a valid visa.
There are more serious grounds of refusal that make refusal of entry more likely, for example, any kind of misrepresentation, criminal records, health conditions or previous violations of immigration/customs laws in Canada or elsewhere.
The generic grounds of refusal (e.g. the dreaded "I am not satisfied that you will leave Canada by the end of your authorized stay" without justification) may still be a problem, but could be overcame at the border with the current valid visa if you are prepared to present justifications regarding the purpose of stay (e.g. return tickets, proof of financial means and ties to the home country).
Refusing a new visa to a person currently having a 10-year visa is rather unusual unless there are considerable changes in their personal circumstances. So caution should be exercised and if possible you (your parents) should try to understand the possible reasons behind the refusal. But unfortunately often the refusal letter is not specific enough. It may be worth it to demand the dossier (GCMS notes) from the IRCC under ATIP.
It is not unheard of for IRCC to simply make the decision quite rushly, especially under current situation of extended back logs. There are cases where an application is approved after refusal of a previous essentially identical application, or where an applicant that should have been eligible for CAN+ program got refused because they did not submit a document that was not required under CAN+ program or by the online application form. So being refused alone does not necessarily means that the applicant is not admissible or there are some specific problems in the application.
A family member of mine was refused a Super Visa for a generic reason. GCMS notes were not helpful (no specific issues were identified at all) and showed an unusual sequence of events where a refusal was entered a day after the visa had been approved. In any case, they entered Canada successfully using an existing visitor visa less a month after the refusal.