Even Brees, whose prey drive is out of control, recognizes largish babies as humans (she has never seen a brand new one). She's mostly nervous around toddlers. I would never leave her with an unsupervised rugrat, because I'd be afraid the kid would do something dumb and hurt her, or get bonked in the face by a playful snooter. I don't leave her with unknown adults for the same reason. Use common sense and everything will be fine.
And on the small dog thing, it took us bringing a wandering shih-tzu home for several days before Brees realized that not all small fuzzies are food. The first night, she barked incessantly at the closed door it & I were behind (after "tasting" it when I first brought it in). By the time we found its people, she knew it was a dog, and now recognizes small dogs as not food.