No. So, for example, if you hold settled status and have children who are EU citizens and aged less than 21, you can obtain settled status for them even if, at the time, they do not reside in the UK.
Nonetheless, there is one particularly notable complication to heed if your children are EU citizens, aged under 21 and living outside the UK but you hold pre-settled, rather than settled, status when applying to bestow your own UK immigration status on these children.
Once they do gain pre-settled status in this way, they would not be immediately eligible for settled status, as they would not be considered to have been ‘continuously’ resident in the UK for at least the last five years.