Nope it goes like this. Weird stranger wants to parent your kid, tell her to pound sand. They call the cops and portray you in the worst light possible, making thinly veiled insinuations that you are not providing a safe environment for your child.

You don't know this person. A little old lady is unlikely to be a child molester statistically but it has happened. So when the cops knock on your door, maybe that's the concern that leaps to the front of your mind. Don't accuse anyone of anything just mention details, for example perhaps she touched him on the stomach to stop him "she placed her hand near his penis". Get creative. "Obviously a sensitive topic like this can't be discussed in earshot of the child victim".

You may say "I want to do the right thing" and that's fine, but personally I want the right thing to happen (ie. Kids being allowed to play outside) and I'm willing to bend the rules in the very same way that the people trying to prevent that are.