This could be way off base. However, I think scarecrow and fungus are the parents of the "Brother" in the story. The mom is the scarecrow because she never stood up for herself and the dad is the fungus because he was a jerk or something. It could also be the other way around. They were bad parents to him and that was the "red light" that they ran. When she says no one got hurt, it's sarcastic because even though this guy is rich he's really hurt by his parents. He became mal adjusted and everyone speculates why. I also think Regina was showing their new baby (scarecrow and fungus's baby) what his brother turned out like. Either to show that it will happen again or to try and stop it.
This could be way off base. However, I think scarecrow and fungus are the parents of the "Brother" in the story. The mom is the scarecrow because she never stood up for herself and the dad is the fungus because he was a jerk or something. It could also be the other way around. They were bad parents to him and that was the "red light" that they ran. When she says no one got hurt, it's sarcastic because even though this guy is rich he's really hurt by his parents. He became mal adjusted and everyone speculates why. I also think Regina was showing their new baby (scarecrow and fungus's baby) what his brother turned out like. Either to show that it will happen again or to try and stop it.