I only wish I would have been there. I don't care who it is, No man or woman has any right to touch a child in a derogatory manner. If people can't keep their remarks, especially to a 2 year old who doesn't really care which sexuality he is right now, I would have pulled his larynx to the side and stretched it from his Ear to his Azzhole, and then tweaked his windpipe until he was blue in the face, all the while telling him before he passes out I'm going to relocate his scrotum if he ever said that in front of me again.
Now, mind you I'm not trying to be tough but it's exactly what I would have done. Nothing infuriates me more than people not doing anything is a person whose bigotry is intolerable....