Those are not as widespread here, but we do have them. Mostly they are inner streets and driving through traffic is often prohibited, so they don't attract much traffic. Yes, kids play on them, and the number of accidents are strikingly low. Drivers tend to respect these areas and drive at around 15 mph speeds. Yes, the streets are a nuisance for drivers, so most tend to avoid them. People usually walk on the middle of the street, but give way if a car comes.
I don't see any problems with these.
Like here: