The SDLP going into opposition might be them trying to challenge Sinn Fein in some way; being in government hasn't exactly helped them recently and maybe going into opposition might differentiate them from their main nationalist rivals
Its not a bad thing; there being an opposition is a positive in Northern Ireland even if it the major parties in it are the SDLP and the DUP. Provided that the government has parties representing both communities in it, this is a positive development...
I'm hearing that UUP and SDLP won't sit with DUP because DUP backs the UK leaving the EU.
Doubt it; I'm pretty sure that the UUP have a pretty large Eurosceptic wing of the party and Sinn Fein are as pro-Europe as you're ever going to get in the UK. Europe's not exactly a big issue and not one that the Assembly deals with at all, I don't see why parties would refuse places in government because of it. I think that its both parties wanting to show clearer differences between the two main parties; and also because they couldn't get the concessions from the DUP or SF as they wanted - the latter was the reason why the Alliance refused the Justice Minister position.