ok so my girl is now 5 and she has always been a little bit timid. her normal behavior is to start 5 to 10 feet from someone and bark at them till she builds the courage to get close enough to sniff them and then she is good, this is what she does with adults.
I'm a little perplexed that you would describe her as well socialized while the quote above is how you said she greets people. That is not how a well socialized dog greets people. That is how a timid, anxious dog that is uncertain about people greets people.
The amount of socialization a person does really has no bearing on how well socialized their dog ends up. It is the type and quality of socialization done that matters. Every dog is different in how much socialization they need to end up "well socialized". Two owners could take two puppies and socialize them in precisely and exactly the same manner and the pups could turn out very differently "socialized".
Additionally, when a trainer or behaviorist talks about a dog being well and properly socialized, they are referring to the exposure and experiences a dog has during a very particular developmental phase (3-16 weeks old) and the result that has on the dog's temperament. You got her at 4 months. That phase had ended and you had no control over what her experiences were prior to that. My guess is that is a huge part of why she has "always been a little bit timid".
Now, as for the question of why in the last five years it hasn't been an issue but now seems to be--I think the answer might be as simple as for the last five years you haven't had a 7 year old child with 7 year old friends. Are your son and his friends playing more running and jumping games? Are they outside more? Are they louder? Does there tend to be more of them now? It could be that it is not just the fact that they are young kids but that now their level of activity or the number of them is over stimulating to her. Combine that over stimulation with a little bit of uneasiness with them in general and you can easily get a dog that behaves in whatever way it feels it needs to just in order to get the kids' activity to stop.
I see individual dogs like that a lot actually in groups of dogs at the dog park. They get agitated when there's too much uncontrolled activity going on and will attempt to bark, nip, lunge, and shoulder check the other dogs into stopping. It is like they can only stand a certain level of frenetic energy around them before they are compelled to make it stop by whatever means.
You could also have the flip side--still a generally timid dog, maybe even with less socialization than was necessary given her temperament, but one that is actually trying to engage with the kids and have fun with them yet is also still over stimulated and unable to control her impulses. This is less bad than if she is acting out of fear, but a kid could still get just as hurt. Given how you described her and her actions though, I don't think this is merely a case of over stimulated and uncontrolled play behaviors. I think the kids and their activity make her uneasy.
Either way, a behaviorist will help you figure it out while keeping everyone safe.