Exactly, people are making breasts into something sexual and in this case they aren't. She's feeding her child.

People don't give kids enough credit, it's more about parents being embarrassed about talking to their kids than the way the kids actually react. If you said "she's feeding her baby milk that she makes from her body, it's polite not to stare," most kids will just shrug and go play, they don't think it's a big issue.