That looks like a fairly decent way to explain it. The long paragraphs starting "This might be okay, sort of" is a bit dense for a third-grader. I would instead, just leave it out and say something like,

But we've checked, and actually, not everyone has an equal chance yet. When people in power set things up, they set it up to work well for the people who they thought were important. For a long time, the people in power were almost all white, and were thinking about things working well for white people. So sometimes on purpose, and sometimes by accident, they set things up in ways that didn't work so well for people who were black. Some of those rules and ways of doing things are still around today.

Also, I'm not sure I've heard any serious proposals about making reparations to Native Americans only from the descendants of the original settlers? That seems like a challenge to prove, though I guess with Ancestry.com you might be able to come close. Maybe leave that out, and instead say something about how the consequences still negatively impact people today, and that therefore some people think we should find some remediation.

The doctrine of generational sin is I think pretty radical as a legal theory, no? But there are ways to phrase it that don't imply that. (Also, you would lose 10% of your state funding if you were to teach that in Wisconsin.)

I wonder whether Nathan would object to this language? I don't think it would fall afoul of even Florida's language about not teaching that "racism is embedded in American society and its legal systems in order to uphold the supremacy of white persons", at least not in my version. In the paragraph that I think is too difficult, you suggests not only that it is embedded, but that it's natural to want to do that. But otherwise it's in the clear, I think.