Some time ago an elderly couple surrendered their two dogs to me. I spoke with them at length about the dogs proir to taking them on.
When i picked them up one of the dogs snapped twice at their grandchildren who patted them on the head to say goodbye. Not a good start.
During the next 3 days I assesed him and had his health checked by my vet.
He was an accident waiting to happen and very unpredictable. He was pts in my arms.
Its very difficult to give advice over an internet forum.
If you have any doubts or concerns about the decisions you need to make, seek a very experienced and sought after behaviourist who can guide you through the decision making process.
What your little dog has done is totally unacceptable, your child could have easily lost an eye or been badly scared.
If I was in this position, and one of my dogs had done this I would pts immediately.
I would never rehome a dog under these circumstances.
I am sorry you are in this postion, and wish you all the best with what you decide.
"There is enough love and concern for animals in every community to overcome the irresposibility of the few"