As a default and certainly where there is a stop sign, they need to stop, regardless of what is happening, scan both directions for traffic, wait for any cross traffic to clear and then proceed when safe. Until kids are old enough to understand traffic they should be taught to walk across roads. To prepare them to make turns across lanes, they need to be taught to scan to the rear for traffic and signal before turning. For ordinary bicycling learning safety is more important than equipment. Of coarse it is important that the bike fits, it has coaster-brakes and be in good repair, especially the brakes so that slowing down and stopping can be controlled.
Helmets are the next most important piece of equipment.
They don't do anything to avoid crashes, which is the real objective, but they can be important in reducing head injuries if one should occur. Given the grave potential consequences and the cost of prevention, helmet are excellent value. Probably the most common, unintended, part of the body to impact the ground is the palm of the hand. To reduce these injuries, leather palmed cycling gloves are available, but to a lesser extent in kid sizes. Beyond this, because of the injury patterns for bicycle accidents, there is not a lot of emphasis on other protective gear for bicycling.