CAR, that is beyond ridiculous! But personally I’d hold back the urge to tell the neighbor to suck it. I would just calmly thank them for their concern for your childrens’ safety but as responsible parents you have taught them to ride safely.
My kids bike all over the neighborhood and beyond (we often do nearby errands on bikes) but we always ride right alongside them in the street and have always taught them to be very cautious of driveways, crossing streets, etc.