I'd never leave a dog alone with kids no matter how nice the dog is. Any dog can bite at any point in their life under certain circumstances. Why risk it? They're animals.
But IMO you handled it right.
My dog growled at me twice, about a year ago. I didn't handle it at all, I was too shocked to do anything about it and by the time I wasn't shocked anymore it was too late.
So i'd say keep doing what you're doing but if it doesn't stop after a few times then get a trainer. Much easier to deal with it when they're little.
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