I don't know; they were doing loops around the far point apparently and he said afterwards he called out that he was doing a "short turn".
So basically, Child A changed the 'plan', and although some kind of warning was given it wasn't sufficient to alert
all riders to the action he was taking (obviously not sufficient, as your son didn't hear/register)? And this is not a situation like driving on the roads where one is expected to leave enough gap to stop if the person in front stops.
I know they're kids, but if the parents are trying to claim the whole cost of an expensive bike...
And as screenman said, you should expect to have crashes in racing situations.
Anyway, good luck with whatever you do about it. Hope any arguments don't put your lad off his cycling.