If your mother was Jewish, then her offspring is automatically Jewish (providing they are circumcised, I think).
If they are practicing Jews, then they aren’t practicing Jews, but they are still Jewish. Well, until they convert to some other religon.
If your mother was Jewish, then her offspring is automatically Jewish whether or not they are circumcised. If you are born Jewish you incur the obligations of being Jewish (such as circumcision). Failure to believe or perform these obligations does not make you not Jewish. You are not let off the hook, so to speak.
Since there are many obligations conferred on Jews, conversion is not solicited and in fact discouraged. The obligations of non-Jews (Noahide Laws) are more limited. So unless you really believe in Judaism why incur more obligations to God.
Jewishness is conferred both by blood and by conversion. Many very famous and important Jews were converts. So it is not only racial.
Jewish mythology has it that all Jewish souls, past, present and future were present at Sinai when the Torah was given.
I hope that answers some questions.
Whoops, meant to say:
If they aren't practicing Jews, then they aren't practicing Jews...