That's terrible.
What's the solution though? Stop letting kids play outside? I think the solution should be to reform CPS so it's not so traumatizing, and have more governmental awareness campaigns of the benefits of kids playing outside. I see government billboards all the time about anti-smoking, eating healthy, prediabetes screening. There can similarly be billboards promoting kids playing outside.
1) Childhood independence protection
2) At the bare minimum, victims of CPS reports should be able to face their accuser. Currently laws anonymize reporters, this is not compatible with an open and balanced justice system. Also, needs to be heavy penalties and liabilities for abusing CPS reporting -- asymmetrical risks would end up with just getting the same result over and over again.
3) Cultural change. People that curtail child independence of others' children should be shamed, publicly. People that let their kids have independence, left the hell alone.