What should you anticipate?

You answered correctly. In this situation with many parked cars on both sides and a "children crossing" warning sign ahead, you must expect that pedestrians, especially children, might suddenly step onto the road from between parked vehicles. This is a common risk in residential areas where visibility is limited. Assuming pedestrians will wait is unsafe, so always drive carefully and be prepared to stop at any moment in such environments. This awareness will help you react safely to unexpected situations in similar settings.