The other big safety issue with lightweight trash such as tissues, paper, twigs, etc in outdoor fires is wind. In the wind these things can fly out of the fire and set fire to other things or burn people because they are so small and lightweight, and this is part of why it isn't legal to burn them in your yard in many places. Even if the risk wasn't particularly high because of the weather at the time, I think physical intervention was still legitimate on the principle of basic fire safety rules, which are extremely important, IMO, on a level with rules about going into the street, which similarly render it appropriate to physically restrain a child.

I agree that if the "grabbing" was punitive instead of restraining, and if the child was hurt, it crossed a line, and I think it is likely that the children have not actually been taught fire safety in any meaningful way - it sounds like they don't understand why it could be important and also don't understand why they should listen or pay attention to other adults. That is the mother's responsibility and it isn't something LW is able to really correct though, since they aren't even really a grandparent (and even as a step-grandparent, getting through to children of the age and habits described would likely be very hard).