When they are moving you can not tell if they are breathing or not.If you really need it… copy the animation frames from the breathing action, and paste them into your walk and run cycles and snap some keys.
The features you need are called Bone Blending, and I do not think the BGE supports that feature.( it may with python script)
I do know that Crystal space does though, it makes it very easy to make quake 3 like player models, but they are all 1 continuous mesh…You can blend the torso, and the legs and the head together in any combination.
Another feature CS has is the ability to parent an object to either a vertex or a armature bone… this is great for weapon pickups.It also uses Colllada library for the armatures and meshes if you want… so you can assign ragdoll physics to the armature bones ,and the rotation/location restraints.