I was going to suggest the frosted film - that’s the most sensible solution. You need to stop him being on view to your kids who have every right to look out of their own home’s windows - even if they weren’t deliberately looking into his garden - your eye is naturally drawn to movement or an unfamiliar shape being somewhere and they’d then see him.
Complicated bc he has rights to privacy and to do what he wants within reason in his garden, you and your family have the right to be upstairs without the risk or likelihood of seeing an adult naked man.
The question is whose responsibility is it?
It’s difficult bc it’s his garden and if there’s nowhere else for him to be outside naked and away from the public gaze then he should be able to do it there in privacy. Except it isn’t completely away from the public gaze bc you can see him. Do any other neighbours overlook his garden? Would he be able to realise you can see him?
Also, what’s he like generally? Do you ever talk to him? Is his demeanour such that you think he’s fairly arrogant and entitled and would do it regardless of whether you and your kids can see him, or would he be mortified? Hard to judge unless you bring it up. You don’t want to cause any issues but it definitely needs to be addressed.
Maybe mention in passing what you are planning to do with your garden and say you can’t help but notice his decking/ garden furniture/ begonias from your window - where did he get them from? etc. something where he tends to settle himself so he’s aware he would also be visible. It would highlight your viewpoint but would avoid the embarrassment of telling him you’ve seen him naked, to both parties.
People have a right to relevant privacy, but it is relevant. If he’s aware he’s visible he shouldn’t be naked, especially in front of children - you’re not allowed to have sex in your garden if you are in view of others - it’s to do with outraging public decency or something.
Failing that, put up the privacy film. It will let in the light and protect your children.