I think we underrate kids. Most of them really are capable of following rules and making the distinction between play and reality.
In our youth, we too had cap guns and squirt guns aplenty. Christmas of my eighth year was fabulous as I received a "Dick Tracy Snubnose .38" that fired "shoot-em shells" and used greenie stickem caps. I also received the "Dick Tracy Shotgun" which fired a cap (one at a time) but was also a squirt gun with about a 20 yard range! Playing cops & robbers or "army" around our house was a huge amount of fun that year.
What did all that play teach us? Tactics, camoflague, the difference between cover & concealment, stalking, stealth, surprise, how to critique each other, teamwork and how to resolve arguments equitibly. My father sometimes gave us instructions on how to handle our toys like real guns, prepping us for "the day" when we had a real one.
With a mother who was against BB guns (you'll put out your eye) I had to wait many years before I obtained a real firearm. When I did, Dad reiterated the safety rules to me while looking at my new S&W Model 39 9mm pistol. The next day at the range, after firing it, he said he liked it and I'd made a good choice. After that day, I felt as if we were peers (but not necessarily equals).
Side note: Two of my contemporaries went to Vietnam. One returned. The one who didn't was the one who's parents never allowed him to play with toy guns -- or to play with us when we did.