Pups this age are running a training programme disguised as a game. The pouncing, the stalking, the sudden ambushes on a sibling, are the exact motor sequences they will use on voles and ground squirrels within a couple of months, rehearsed thousands of times before any of it matters.
They are above ground because they have reached the age where the den is too small and the adults have started bringing food back rather than nursing. This is the brief window when coyote pups are both visible and careless, and it closes quickly: by late summer they are far more wary and considerably harder to find.
Coyotes are the most successful large predator in North America by a wide margin, and the reason is that persecution does not work on them. Heavy pressure on a coyote population triggers larger litters and earlier breeding, so the species has expanded its range across the entire continent during the period when it was being most intensively hunted. These pups are the product of an animal that cannot be discouraged.