The man watching the battle is actually Aldrian, while the woman comforting the children is Sylphia. Aldrian has been in Larson City for four days, observing the Larson family's situation. He stands on the sidelines, watching as the Larson family's problems grow, curious to see how they will respond.
The assassins from the Thunderous Shadow Pavilion, whom he had ordered to assist with the Duclan family operation, informed him that the young master of the Larson family was likely to visit a brothel. Curious about the young master's character, he decided to observe him while taking Sylphia for a walk.