It sounds to me like some sort of… intellectual dysphoia? Not unlike someone in the throes of bulimia; who despite evidence to the contrary, can not see themselves as thin enough.
To the OP, I don’t think that is a hypothesis that you can dismiss. Aliefs are pernicious. All we can really do is work with the brain we have. It took me a bit to accept ADHD as a mental disability. Once I made the flip, I was better able to set realistic expectations, and request accommodations and use my tools as mental prosthesis. A lot less negative self-talk.
It really is okay to be good enough.
After my kid was old enough to watch out for cars, he basically got free rein of our neighborhood. I also got him a cell phone early, so that he wouldn’t get lost, and we can communicate should we need the other. He has friends around the neighborhood, and I know most of their parents.
I really haven’t experienced other parents being overly concerned. Typically they are playing together, and the kids are old enough to manage themselves. My son is 13, so he’s almost past the point where anyone is going to blink at him walking alone, but I was always prepared to challenge anyone who didn’t think that he could manage.
One big change from when I was a kid is that my son can socially play video games way easier/more effectively. As a result, he’s more likely than I was to be playing video games, because they have way better communication tools. He doesn’t ride a bike like I did, and I think that a part of the reason is that he’s able to be social and play with his friends, all without leaving his house. If I didn’t ride my bike, I just wouldn’t see my friends.
I’m skeptical of these trends, or at least in the causal links implied here. The world is a bit more complex, and we have different tools, but I don’t think things are so radically different. My folks didn’t have the option of buying me a cell phone when I was a kid, but I’m sure would have had they been available. If Roblox was a thing when I was a kid, I likely would have played with my friends on there (technically around my folks) rather than biking 1.5 miles to my friend’s house. I didn’t have to worry about a global pandemic, nor did I grow up concerned about a changing climate. The internet wasn’t a thing. Heck, mental healthcare was practically taboo.
I think that the kids are going to be just fine. They have unique challenges, but they also have better tools to meet them. While I also believe in free-range parenting, my son’s friends whose parents prefer a more supervised style are great kids too.