It shouldn't affect their JSA, as the prinicipal thing is that they are available and looking for work. Doing craft in their spare time isn't a problem.
If they intend on going to markets and stuff, then they might have to sign off the dole for that morning or whatever.
Obviously if they start making a profit, they are then earning income and must declare it. I don't think it'll have much impact unless they're really taking in the money, in whcih case, they'll have to register as a self-employed person and pay tax and all that...