In Pakistan, this issue is nonexistent. In Islamic culture, people say 'Assalamu Alaikum' when they pass near each other. Not everyone does it, but it's a religious practice to greet and bless everyone. If a kid passes me a smile, I will smile back at them.

Although, upon deeper examination of society, in certain conditions, it is present here too but is too little to observe. If you ever get a chance to visit Pakistan, it's like a different world. The problems here are too different to consider a stranger's smile as a threat (conditions apply).