Bingo. I think I would have strangled that dog (I don’t care how big or expensive it is) and/or taken it out to the back 40 post haste.
Then again, my dog wouldn’t have been so obnoxious as to even be allowed to THINK he could get away with that. My dogs have yelped and barked when ears got pulled and I would certainly intervene and explain to the kids they should not do that to the dog but come ON!
You stated it very well. Our breeder told us that no dog should ever be allowed to place his teeth on any human skin period, from the day we got him till the day he went to doggie heaven.
Who let this dog think it was alpha, in that household? NO dog ever disciplines ANY human that visits or lives in the house.