If you're seriously concerned, suggest the older kid check out local youth services...
How much experience do you have with what happens with "youth services"?
This is not a joke. This isn't a hypothetical now. This isn't an argument about something like whether low level PC's could know whether a troll is vulnerable to fire. These are real lives we are talking about mucking with. Any time you bring the authorities into this conversation, you are risking the health and safety of the minor, so you better damn well be sure that you are actually protecting the minor from an equivalent level of risk of death and bodily harm. This is not something you do on a whim or because you are offended.
We have an adult here that was complicit - however unwittingly - in encouraging a child to disobey his parents and sneak out of the house. And you are like wondering why the parents might have lost their cool? I related this story to my wife and she was like, "And he thinks he's the one that has a right to be angry?" So while we are on the subject, yeah I pretty much think I'd be the one offering apologies in this circumstance.
The reality of the world is that I had to explain to my children that there are monsters in the world. Some of those monsters are the sort that might want to prey on blond, blue-eyed girls. But some of those monsters are the sort of people that get offended because they decide they don't like how other parents are parenting. When my child at age 10 asked why they couldn't walk to a friends house alone, it was that later class of monsters that was foremost in my mind, because there are a lot more of them in the world than the overtly predatory kind.
Every once in a while some Christian or Christian community thinks it is a great idea to facilitate bringing children from non-religious homes (or other religions) into a religious context to bring about a conversion experience or get them baptized or whatever without the consent and knowledge of the parents. It's that sort of well-meaning stupidity that this notion that a parent banning a kid from playing an RPG and taking away their toys constitutes "abuse" reminds me of, and I think what's really going on here is not well meaning concern for the kids, but moral preening, bigotry, self-righteous, and a complete failure of empathy for cultures outside your experience.
If you think my language is tough and confrontational, then yes you are getting my drift accurately. I've been on EnWorld 15 years now and this is the first thread I've been in however heated that was actually freaking scary. All the useless verbiage about a leisure activity have nothing on the content of what is being argued right now. These are lives we are talking about. Don't squeeze any triggers unless you are sure of the consequences. I can't imagine what might have happened had someone like the OP "intervened" in my life, but it likely would have killed me. I don't know what is going on in that home, but the whole notion that what was witnessed was abuse would be humorous if the consequences involved weren't so terrible.