Ross Geddes (personal communication, 3 November 2004) suggests that the phrase “in unbelief” is missing at the end of this verse. Except for one case, all other occurrences of dwindle (25 of them) have “in unbelief” following. The exception is in Helaman 4:23, where the reference to dwindling apparently refers to the church diminishing in size (“because of their iniquity the church had began to dwindle”).
Another way to read the end of 4 Nephi 1:38 is as a case of ellipsis, although there is no ellipsis of this phrase elsewhere in the text. In fact, no other passages show such an ellipsis when two instances of dwindle occur close together:
The last part of 4 Nephi 1:38 refers to the children of these willfully unbelieving parents, suggesting that the children’s unbelief would have been a case of dwindling. In this instance, it seems unlikely that the phrase “in unbelief” was lost as Joseph Smith dictated the text to Oliver Cowdery. The critical text will accept the earliest reading in 4 Nephi 1:38; in other words, we have a case of ellipsis that purposely lacks a final “in unbelief”.
Summary: Accept at the end of 4 Nephi 1:38 the earliest reading without the phrase “in unbelief” after the word dwindling; here the phrase “in unbelief” appears to be ellipted.