Plenty of kids whose parents were watching them got hit by cars, because parents can't be watching every second. Kids with a tendency to get carried away and run in front of cars are going to do it even with their parents in view. Better to condition kids not to do a few obvious dangerous things, than to maintain constant vigilance and try to intervene before they do dangerous things.
Also, these days, a parent "watching" their kid(s) means proximity, not awareness. The parent may be within view, but that's useless when they're glued to their phone a good percentage of the time and only glance up now and then.
No, acceptance of risk, which is very different. My parents let us roam free. My parents did not think we were perfectly safe. But my parents thought we could only learn independence by being independent. The question is why those risks are no longer tolerated in the USA. Yet such risk still seems acceptable in Finland, Japan and many other countries.
Kids getting hit by cars is more of the fault of our society allowing cars to drive so fast in neighborhoods. Not the fault of the seven year old or the parents.
Also, these days, a parent "watching" their kid(s) means proximity, not awareness. The parent may be within view, but that's useless when they're glued to their phone a good percentage of the time and only glance up now and then.