Longtime lurker who felt compelled to post on this topic. As background, I have a 6 yo in Bronze and an 8 yo in Level 4. My 6 yo scored in the 32s in her first meet and my other daughter has won all of her meets so far this year, so I've been thinking a lot about this. So far there hasn't been an issue, in part b/c we praise them for the inputs rather than the outputs, try not to compare them, and remind our youngest that her sister was not even competing at her age (which she is very proud of). I offer the following observations that have really helped me calm my inner crazy gym parent (we all have one to some degree!)
All the long haul gym parents on this board have helped me realize that gymnastics is an ultra-marathon, not a sprint. Early results at the compulsory levels mean almost nothing about future success, and more importantly, what they are going to get out of the sport. So enjoy those early days when there is no pressure and they do it for the love of the sport. One thing that helped me (and my girls) calm down and enjoy the journey more was checking out Jade Carey's scores on mymeetscores. Jade almost never won any compulsory meets, scored a 31 at Level 7 and never scored above 37 until she got to Level 10. And Jade is not an isolated case, even among Olympians. So no matter how they do in the beginning, who knows?
In contrast to Jade, go check out the "No Days Off" videos of Chandler King and Jurzi Cromartie on Youtube, both touted as the "Next Simone Biles". They were training 35 hours a week at the age of 9 and doing insane skills for their ages. But now, despite loads of raw talent, both are completely out of the sport. It's tragic that this still happens so often in gymnastics and I see it over and over, kids that burn too brightly and burnout before reaching their potential and coming to hate the sport that they once loved.
Parents also believe that gymnastics improvement should be linear and that more inputs will produce more outputs, but neither is true. Sean Johnson only trained 24 hours a week at her peak, and I'm starting to believe this is about optimal for any gymnast to avoid injury and burnout. To reach your potential, it's all about staying in the sport and avoiding injury. Also, as you probably experienced with raising your child, development isn't incremental but rather is sudden and abrupt. One day a baby can't crawl, and within a week they are into everything. It's the same in gymnastics, one day they get a firmware update, reboot and they can finally do that kip no problem and never fall again.
Stopping myself from worrying about scores, winning and medals has allowed me to start refocusing on the important stuff you mention in your post, the fantastic benefits that gymnastics in a healthy environment offers. Are their teammates supportive? Are they still happy with the sport? Do their coaches treat them with respect? etc. It's great you already see and appreciate this, it took me a while to get here.
p.s. I would love if USAG imposed a maximum of 20-24 hours per week for all gymnasts under 16 to prevent kids (or heck even Simone Biles) from being pushed too hard.