And then everyone clapped...
I grew up "free range" and looking around where I live this is still the predominant approach to parenting. So I really can't relate to the vibe in this whole thread. (all in Massachusetts and Maine btw)
That being said, the last thing my "free range" friends and I wanted growing up was some weirdo adult observing our "unstructured freeplay". As soon as we determined this lady wasn't a cop we would have created a lot of reasons for her to leave. Kids aren't monkeys in a zoo for you to observe lady, move along or get some feces in your face.