I don't discipline, because it's not my place, not my child.... nor do I ignore.
It really depends on the age of the kids involved and what's going on. With my son moving toward 7, we might have a quick reality check on standing up for ourselves and "well, he's not talking in a very nice way, you can choose not to play or you can talk to him about it".... In the situation you describe, with the ages you describe, I'm a lot less likely to empower a three year old to handle a meanie themselves. So, if I heard this, I'd likely just hang close so MY kid felt reasonably safe, and if the mean kid continued to do this, I'd just tell the mom -- "hey, looks like your little guy needs help, he keeps threatening to hurt Kiddo".
Here's the thing-- I don't hang out with moms who let themselves be doormats to their bratty kids. Period.I stopped attending a moms group for this reason... the one hurting brat whose mommy made excuses. No skin off my nose, more like a relief. To not respond is to act stupidly, and to choose to act stupidly-- well, I refuse to be around stupid people whenever I can help it. The problem is really with the adult getting off their butt, putting their brain in gear and doing their child the service of *guiding them in life*. I have no respect for parents who can't be bothered, for whatever BS reason they come up with. Short of a major crisis, we shouldn't be so checked out we aren't responding to another adult's request for help.
So, in short- if the parent makes an effort to address a problem, we are fine. I'll still stay close,and we might go home early if my kid isn't having any fun, but if the parent could care less, then so could I. True friendship is a two way street-- my friends and I, we know our kids aren't perfect, but we are attentive and so it works-- and our kids have a great time. For the parents that refuse to be responsive, we just don't hang out any more. I do not suffer fools gladly and don't like seeing parents choose to raise future monsters by not parenting when they need to.