To me, it's usually a risk-assessment of whether any negative consequences would be life-threatening or merely inconvenient. With something like tree climbing over soft ground at a reasonable height, I would consider the consequences of falling to be inconvenient (e.g., stunned, a bruise or scrape, or even a broken bone), but not life-threatening provided the height wasn't too great. Of course, a broken bone would be more catastrophic at some times than others, too, so it obviously would be on a case-by-case basis.
The thing that I struggle with now is my DS13 walking 45 minutes across town by himself to an activity at his request. I let him do it after reviewing rules with him and I know he's 13 and 6 feet tall so probably not a potential kidnap victim, but it still makes me slightly nervous and I make him text me a couple time along his route and when he arrives. We live in a smaller town, though, and the route isn't full of busy traffic.
I'll let DD10 walk to a neighbors house about 10 mins from ours, but we're in a fairly enclosed neighborhood with very little traffic and I can see her for about half the way. I wouldn't feel comfortable with her going too far outside of our neighborhood unless she had our big dog, though, because she's still small enough to be snatched (although I know it's extremely unlikely to happen). For me, the negative consequence would be life-threatening.
Of course, I make my kids wear helmets when they ride bikes and ride in booster seats until they met the height requirements. Again, to me, a case of possible life-threatening consequences rather than merely inconvenient consequences.
But obviuosly everyone's assessment is different and often affected by accurate and inaccurate risks reported in the media.
