One of the reasons old people can't look each other in the eye, is that they all have seen what they are willing to do to each other to get junior a good start in life.
But re-reading it several times now, I don't see it. When I look at their kids and think to myself "hey, they might make good husbands/wives for my own kids" where is the Freudian?
I am on the lookout for my kids. I can't tell them who to marry, but I can put them in circumstances where there are people their age that I approve of, such that familiarity might blossom into something more. I've seen how it turns out with other people's kids when they act like that's none of their business and actively avoid the thinking, and I don't much like the outcomes.
(Not that I agree with what the OP said either - I think most people have a protective instinct towards all children without thinking of them as potential spouses for their own offspring. We see this behavior in other primates too, eg: https://sitn.hms.harvard.edu/flash/2021/mountain-gorillas-ad... )
He is using personal pronouns consistently: "myself" and "my children". "Their" children is the other children he is observing, and he is thinking to himself.
https://www.nytimes.com/2020/07/23/podcasts/nice-white-paren...
In truth, all humans are equally worthless.