What to expect from a seriously mentally ill individual when a poor prognosis is revealed through improper channels? I recently learned about a friend who is suffering from some serious mental illness from someone who has yet to reveal this illness to the individual.  Apparently the individual in question suffers from Narcissistic Personality Disorder (NPD; and perhaps some other serious issues) and has very, very little chance for improvement through treatment as the prognosis is very poor according to the professionals. This is compounded by a likelihood that this individual is going to lose their children due to the circumstances of the situation.

My question is, statistically or experientially, what kind of a reaction can one normally expect from such an individual?

This person also, in the past, had an obsession with death and "murder scene" magazines. They also have lost someone very close through a family murder / suicide wherein a parent killed their entire family (spouse and children). This left an absolutely indelible impression upon this individual. This person also has a very reactionary and violent personality that tends to escalate issues that should be minimal. They frequently will become angered or even rage instead of having a normal weepy reaction to such stimuli that might cause a regular person sadness.

The reason I ask is that this person has children and I am extremely concerned about the manner that this news will be revealed to the individual.  I would like to understand what kind of risk the children and their spouse (with whom they do not have a good relationship) are in.  

Unfortunately I don't have any real power over the situation but to perhaps offer some suggestions and try to keep close (but safe) in order to keep the children out of harm's way. This has me very uncomfortable and worried as I don't have much power over the situation, but I would like to know potentially what to expect.
There is an answer to a similar question regarding narcistic behaviour and negative feedback reaction: 

How can a narcissist be given negative feedback without triggering aggressive behavior?

It is a more general answer. The case you described has surely a lot more facets and details to consider.
I would have just commented it, but I don't have enough reputation.