That does sound like just weirdness rather than predatory behaviour. A more appropriate choice if he wanted to be nice was smile, make some generic comment like 'Aww she's cute' and give the MOM the pound and say 'That's for the kid, to get herself some sweets or something'.
But yes, you never know. Glad you reported it. Better to report than let it go and have some kid end up abducted or dead.