Your son was assaulted. That is what the behaviour of your ex-friend would be named legally.
He didn't hurt your child physically, so it was the lesser form of assault (assault causing physical harm is seen as more serious.)
You certainly could file a police report....I don't know the law where you are, here, it is quite likely that police would go around and question the man, making it clear that (if your description is accurate) he had committed an offence, but you could decide against filing charges.
Again, depending on where you live, you could likely notyify child protection authorities. here, being extra-familial, and given that you have already decided not to expose your child to hm again, they would simply hand it to police.
If you release a legal genie from the bottle, though, you lose control of what the genie does.
For instance, you and your son would need to make a formal statement. It might be that police act even if you don't want them to. It might go to court.
I'd personally not choose to do it tthat way...though you could certainly chat to local police without naming names and see if there is such a thing as a stern chat, or a formal caution to be had in your area.
I'd hope that a stern talk from you and the loss of the friendship would be a big message to him.
However, my concern would be how he treats his own kids.
That was one hell of an over-reaction. If you have evidence that he assaults his own kids, I'd be considering a chold protection notification.
is your kid ok? That would have been scary. Is he having nightmares or anything?
I'd also be having a chat with him about his behaviour. It didn't warrant such a reaction, but he was thoughtless.
If it was really unusual behaviour from your friend, I am a bit worried about him, too, frankly.