You seemed to point out that your pup might be shy around kids
If this is the case you might be able to make this behavior go away
A lot of Yorkies are frightened by children
They are fast
They make quick uncoordinated movements
and they tend to lunge toward dogs
This frightens smaller dogs
The way to make your pup more comfortable with kids is enlist some of your family's children
Have them come into your house with a trest in their hand
and warn them that they are not to acknowledge the dog until you say so
Have the walk in
and walk to a chair or a couch
after your dog goes to them and isn't cowering any longer
then you say it's ok to give him the treat
do this a few times
and you'll soon see that the pup will think
Hey Kids.... Treats