In terms of the kids you babysat for, kids do things like this. Maybe the parents’ didn’t feel that it was necessary or helpful from a chinuch perspective to say anything about it. Parents have to “choose their battles”, and sometimes it’s better not to make an issue out of things.
I have heard quotes from Rabbanim or Chinuch experts that when your kid does something that you know he will outgrow and not do as an adult, it is usually not a good idea to make a big deal out of it.
Children are not obligated in Mitzvos. The purpose of chinuch is to make sure your kids learn to do the right thing so they will act properly as adults. When it comes to things that they won’t do as adults anyhow, it’s possible that chinuch doesn’t apply.
I have no idea in this case if the parents did the right thing or not, and I do not know what the best response would have been. I am just explaining why they might have chosen not to say anything.