Toddler on a dual sport, possible?

Not really! It has more to do with always wanting to have the last word, than actually caring.

I wonder if the OP has considered the risk exposure of riding around with his toddler.

Risk exposure is simply the chances of something unforeseen (risk) happening times the consequences of that risk should it happen. I think the chances of the child being injured are very low, but the consequences are severe to the point of serious injury or death. A low risk times a very large impact/consequence means a very high risk exposure. Yes, most of the time nothing bad happens but when something bad DOES happen it's very very bad. As in, dead child bad. Looking at some of the photos from back in the day of people riding around with their child in a backpack carrier, at least they're riding slowly on dirt but if the father did fall the child would be injured enough to require a visit to the hospital/ER. Getting away with something doesn't make it a good idea.

In short, I wouldn't do it. I think there would be less risk exposure leaving your toddler home unattended for 30 minutes than to ride down to the store with them sitting on the tank of your motorcycle (not that I'd do that, either). As others have posted, unless some version of the Apocalypse was in progress I'd wait, or call a cab, or walk, or find another way that would not endanger my child. A lifetime of regret often follows a disregard for the risk exposure.

Regarding the folks in the Developing World who ride 3 or more to a Honda Cub or scooter... look at some of the Youtube videos after searching for 'motorcycle crashes.' It isn't pretty. People in the Developing World also often drink and bathe in non potable water, but that also isn't conducive to good health and long life.

What's the normal outcome for an accident?

A few bruises and grazes, then they pick up the bike and carry on, usually. Occasionally a bit worse, but not often. Being light weight, the laws of physics mean that chances are youngsters suffer less injury than adults.

Most folks here are not thrill seekers punting their bike along at high speed, carving corners and probing the limits. They are just getting around on a vehicle that makes economic and ecological sense.

In a few years that young fellow will be riding himself, maybe with a girlfriend or a couple of mates on board. As a bullet-proof (but not kevlar clad) youth he may get pissed up and ride more boldly than is wise. He/they may join the rather appalling statistics on Phuket's mean streets.

If he survives those daredevil years, he too will probably become the father of a kid, whose first ride on a motorcycle will probably be within weeks, if not days of being born.