I haven't had any issues w/ my little ones running around naked yet (my oldest is 3), but I have insisted he put on pants when he goes outside. And I wouldn't want him to get any ideas that he should be running around naked after seeing a neighbor child doing so. If I let him run around at home, then what happens then when he wants to declothe when we are out to dinner or at a friend's house? At this age, I feel it is difficult to teach them the differences in situations. For example, my DBIL can't understand why I won't let my child run w/ his cousins after a family holiday dinner until we call them back for dessert. My reasons were made plain to him when we were dining out at a fancy restaurant on New Year's Eve. My child was sitting quietly at the table (3 yrs old) while we were finishing our dinners.... His kids (7, 9, and 12)were running around and playing in the restaurant (inside, not outside in the parking lot). He noticed their absences just after he said, "My kids know the difference betw. dining at home and dining out nice. They know when they must stay in their seats and when it is ok to play." I didn't have to say anything, he saw for himself. But it is very difficult to train my child how to sit during meals when his buddies are running around and playing. It's a struggle every time we dine w/ them. But if I allowed my son to run around the table at home, why would he think he wasn't supposed to run around the table when dining out? And it's the same w/ naked kids. If my son saw the neighbor kid running around naked, then why couldn't he? And if I let him run around the house naked, then why not at a friend's house? I'm not sure they know the difference at this age.
Anyway, I heard about a person I know who was found at a local park who not only allowed her 4 and 2 yr old boys to run around naked, then do number 2's in the bushes, but then since they had no toilet paper nearby, allowed the boys to then run around and slide down the slide and everything naked w/ poop running down their legs. They must have had watery stools or something because fecal matter got all over the sliding board... but the other mothers at the playground were appalled and said something to her, of which the response was nonexistent. She had no idea what she was allowing was disgusting and crude, not to mention, dangerous. Had she even heard of Ecoli Poisoning? Talk about bacteria! I heard of a child who got so sick from Ecoli Poisoning from swimming in a pool w/ not enough chlorine... What about sliding right into the stuff on a sliding board? Needless to say, the other mothers left the scene shortly thereafter. It might be cute in your own home or back yard, but must we make our neighbors uncomfortable? A PP mentioned that a neighbor child went potty on her driveway....... we don't want the neighbor dogs doing that, why would we allow the neighbor kids?
I'm not sure what the OP could say to the parents of this child..... But I probably wouldn't like it either.
But the rule was only inside, when he was outside, he had to have clothes on. It was "the rule" like any other, no biting, no food throwing, etc. 
