Hussar
Legend
The reason the woodsman, or anyone would feel bad is that, per D&D alignment rules : good implies altruism, and respect for life. That the child has died is a sad event. The death could have been prevented through greater action on the part of the woodsman. He feels guilty about because he feels responsible for the early termination of a life.
However, he doesn't just feel responsible, he is, in fact, actually responsible. He cut down the tree. He is directly responsible for the death of that child. Thus, he did commit an evil act. Killing an innocent is pretty much an evil act in D&D alignments. However, his later actions are dictated by his alignment. Or rather, his actions reveal his alignment. A good woodsman immediately goes to the authorities and pays restitution. An evil woodsman hides the body and attempts to get away with it.
However, good or evil, the woodsman has still commited an evil act. His actions directly led to the death of an innocent.