Something that has started to stick out to me, ever since I started watching and paying attention, is how often (some) dog owners, of much loved pets, are totally unable to recognise when a dog is uncomfortable.
Averted eyes, lip licking, yawning, micro freezes, blicking, head turning, leaning away, walking away (if allowed), turning away.
9/10 times, the humans 'get away' with whaatever they are doing because of the dog's tolerance and because dogs hate conflict and so will tend to 'put up' with something rather than cause a fight. And because their otherwise good relationship with the dog gives them leeway.
It's still worth looking for in our own dogs, though. Do something (e.g. stroke the dog) for 2-3 seconds and then stop. If the dog liked it, he/she will do something to ask for more. If the dog doesn't ask for more... this could be a sign the dog didn't care for it, or actively disliked it.
I've started to lose track of 'cute' dog and children photos in which the dog is clearly, very uncomfortable and the owners/parents are oblivious.
Back to the OP, keeping dog and children seperate sounds like the best option. Either by not going round (as you are) or by not allowing scenarios like the toddler sat next to the dog. This dog cannot cope wth children. This is neither dog or child's fault.