Actually I usually use my Bronica S2A with the 135mm lens and a 15mm extension tube when I'm taking candid shots of children. I can set the camera on my knee or a table and use the waist level finder to be more inconspicuous. I don't see it as less flexible than a 35mm. The main thing is that it's an SLR.

Of course Cheryl Jacobs is using medium format for candid children's shots all the time!

I think the main attraction of MF over 35mm for these kinds of photos is the smooth skin texture you can get with the larger neg.