I hope this dude is not mentally and emotionally bankrupt as you act like he should be.
As I said, what if the cross dressing guy was actually a very masculine looking woman?
Had she called the police simply because she disliked men who dressed as women, you all would have a point. It simply could have been the case that she never has seen that before. It was strange to her and it raised her hackles a bit.
It is true that she might have been concerned. A decade later, people are still afraid of black trench coats. A few years later, people are still scared of viels and hijabs (ok, maybe the entire muslim community as a whole). As annoying and irritating as it is, those two pieces of wardrobe popped someones bubble, and left them afraid. But why would you be scared of someone who is in drag? It's not like a guy wearing a dress opened fire on public streets, shoot up a school, flew an airplane into a tower, or blew up a public building that was occupied.
IMO, this woman saying she was concerned for the kids was a bull**** excuse to harass someone. Thier is no reason to fear someone in drag (or a trench coat, mask, hijab, or any other clothing), but she say someone from a group of people she doesn't like, and decided to stir up trouble. Or maybe it amounts to being afraid of what you don't understand? Still, what reason would thier be to call the cops because you see someone dressed abit odd?