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”This sign indicates a stretch of road where children often cross or where there are often children on or near the road.”
But the sign only warns of children; not pets and other things?
– Yes, but the question is not about the meaning of the sign. The most important aspect of the question is rather the residential area. Only thinking that there may be children around, as is suggested in the first alternative, is not the marker of a mature perspective. This would be like driving at 110 km/h on a motorway in extreme weather and glassy ice just because you have the “right” to do so according to the sign.