This is rather a cool scene, but it makes for a really depressing story. I think it would help to ask yourself what the purpose of the story is, and what you gain from having it be fan fiction.

See, I think this is well enough detailed that it doesn't need to be Full Metal Alchemist. Change the names and it actually still works fine as an original work... and that would give you the freedom to tweak the premise enough to add a bit more interest.

Specifically, there is a lot that is darkly fascinating here, in its way... I think it would work very well as what's called an unplotted story. It's a very difficult form to write, and basically about creating an insight in the reader: moving the reader, rather than the character, from one state to another. The writing of Denis Johnson has a lot of stories like this which might give you the inspiration you need to tackle the form.

At present, I think it fails to deliver more than a cool atmosphere: as an unplugged story it leads the reader too much by the nose, telling rather than showing just about everything about Rose's situation, and positioning the reader to be nothing but a passive watcher with no real investment in the narrative: the text does a good job of selling the idea that it's all pointless anyway... and thus we understand that whether or not Rose's mind is sealed doesn't really make any difference. The girl is practically dead either way.

That leaves nothing really for the reader to care about, from the perspective of a plotted story either. Certainly none of the characters need to reach any particular goal. They all have things they are doing, but they can take them or leave them. Dante doesn't seem to need Rose, in particular: Rose is just a lucky find. Her companion doesn't really care about the children. Rose doesn't care about anything. The only character to express a need is one anonymous child, who wants Miss Rose to be safe... And that child is easily fobbed off, before disappearing from the story.

The plot is straightforward: Rose needs her mind wiped. This happens... in the most direct, predictable fashion. The story is basically over right at the start, when the children are taken away and Rose is isolated and hence doomed. The only real glimmer of conflict is when she and the kids are tricked at the start... and that trickery is both unconvincing and glossed over. Rose is entirely too trusting for a shell shocked Rape victim... to the point of actually letting her captor strip her naked. Any normal person would feel violated, but Rose - a rape victim - takes it in her stride? Sure, she's numb to the world now, maybe she accepts it... except you tell us several times that she is still afraid. Then why is she voluntarily isolating herself and stripping naked for random clearly-malicious strangers she just met? Rather than sympathizing with her, the reader might be inclined to think "no wonder she got raped".

You have to give the reader something to care about. You have to give the characters some kind of real goal, real emotion, realistic reactions. More than anything, you also have to avoid telling the reader what to think. Not only are there no twists or surprises, but the reader doesn't even get a chance to interpret what the story means to them personally... because the entire narrative is one long, drawn out repetition of "it's cool, don't worry; she's gonna get mind wiped, yes, but Rose is better off this way".

Whether or not this is true, the predictable reader response is pretty obvious: "OK, then why am I even reading about it?"

You're answering all your story questions practically before you've even asked them, leaving no real reason to read on. As you imply in your own author's comment, the only real remaining question of interest is what happened to the children... and that remains unanswered, leaving the main thrust of the story both dull and unsatisfying, although from a descriptive perspective it was certainly cleverly written.