I guess a more general form of my question would be: to what extent should the hosts give facetime to guests at a dinner party before serving food versus concentrating on the food preparation, and to what extent should hosts ensure that guest don't feel like they are missing out on something more fun happening behind closed doors?
To answer these questions, I don't think the hosts should be away from the guests for more than about 15 minutes. As PPs have noted, the ideal dinner party meal consists of food that can be mostly prepared in advance with just a little bit of last minute prep. And the more people in the kitchen helping, the faster it should go!
To the second question, I think most parties do tend to break up into smaller groups or separate conversations, whether in different rooms or the same room. And that is fine as long as it's not somehow communicated that the fun group is somehow deliberately excluding some guests. And particularly if the hosts are involved as is happening here.
It's the duty of the host to ensure all guests are having a good time, inasmuch as possible. So yeah, it's reasonable to think that the group in the kitchen, while doing last minute prep, might be talking and laughing. But if it's closed off in such a way as to communicate that there is no admittance to the rest of the party, and if it goes on for an extended period of time, it's not so nice.
I agree with PPs who are wondering about the compatibility of the guest list. If the guests who are not in the kitchen were having a good time on their own, the absence and obvious frivolity of the kitchen gang might not be so glaring.