Okay, so I just want to make a couple of things clear at the outset:
1. The "slapping her butt" thing makes all the rest of this a moot point. I can't imagine a situation where that was ok. Oof.
2. The fact that it made you so uncomfortable you would have had a panic attack seems like it is pretty good evidence that you should follow your instincts. This is a normal, healthy part of being human and protecting ourselves and others, not necessarily a "symptom" of past abuse. I have never suffered any semblance of abuse, and I have CORRECTLY had a bad feeling about guys and their intentions at least twice. In one situation, the guy cornered and tried to grope another girl later that night (she was 17 and in the military, and incapacitated him and then locked him in the house, so he didn't get his way that night at least). I have had that creeped out feeling and obeyed it many more times - I'll never know whether it was necessary, but I still think I was right to listen.
3. I already think that the OP did the right thing in this situation.
On the other hand, I do think that with the (laudable) increase in awareness of child sexual abuse in our society, we have also acquired a disappointing amount of paranoia and fear. I have a dear friend whom I have known since we were teenagers, whom I dated for years, and who I might even be married to if he had a bit more ambition. One of his best features, in my opinion, is that he would make a fantastic father (if he only understood the importance of discipline of any kind). He loves children, and I've seldom met anyone that understands children as quickly as he does. He interacts with them in a way that they really enjoy, and they trust him very quickly. I want to make it crystal clear, if there is one person in my life that I KNOW is not a sexual predator, especially of children, it's this guy. I can absolutely imagine him playing with a little girl and her jumping up on his lap, straddling him, and it would never occur to him that anyone could possibly think that that was inappropriate . . . because he would NEVER be able to think of that as sexual. I can imagine him tickling that girl, and I can even imagine him tickling her under her shirt - but this is because I know a little girl who put my hands under her shirt for tickling her sides when I had just met her that day. She was only four, so it's a little different, but I'm just saying that it's not a stretch for me to imagine a completely innocent situation that contains many of the aspects that people here have called red flags. There are men who will completely innocently interact with kids in a way that crosses their mothers' boundaries, but not the boundaries of decency, and not the kids' boundaries. And yes, this friend has had mothers call their children away from interacting with him and look at him suspiciously for being in the playground. I can understand their perspective, but it makes me really sad for him, because he's just a big kid at heart, and enjoys the kind of honest interaction with no baggage that only kids can give you . . . and this happened even when he was 15 and really was still a kid, not now when he's an adult . . . because he's learned that if he doesn't want to creep people out, he should stay out of playgrounds. Even though he still likes swings and slides.
Again, I want to make it clear that this situation doesn't sound ok to me. The clincher was the butt-slapping. Not ok. Creepy and awful and makes me feel a little sick. But even without that, there are a few little things that I didn't like on reading through the posts before that one. Both of them are issues of control. The man telling her that he was going to tickle her under her shirt strikes me as off. My dad used to pull up my shirt to zerbert my belly (I hope you all watched Bill Cosby and know what a zerbert is, or you'll think I'm nuts) all the time. It was definitely completely innocent. But he never told me he was going to . . . and besides, he was my dad. But even as my dad, it would be kind of weird to tell a kid that . . . the only context I can think that this would be ok is if it was to cause that little bit of "anticipation of tickling" that can be so fun as a kid. Like when I tell my dog in my teasing slow voice, "I'm gonna get your booo-oooone." On the other hand, if the guy had sounded like that, I can't imagine the OP being freaked out by it. The bigger red flag for me was the issue of who was controlling the tickling. This is an issue where some adults genuinely don't know, but kids have boundaries for tickling. The way to respect them is to let them be the ones controlling the tickling. It's a give and take, you have to pay attention to when the kid wants to be tickled and when they need to stop for a breath, etc. It's not a definite sign of a pedophile to be unaware of this, but it does make me a little uncomfortable.
So for me, what it comes down to is this - if I had walked in on a situation where an eight-year-old girl was straddling a man she had met earlier that week, and he had his hands in her shirt tickling her back, and she was clearly the one in control - telling him when to tickle with eye contact, with her hands, with body language (like lunging at him to start him tickling), I wouldn't have even blinked. On the other hand, if I saw the situation the OP described, with the man obviously controlling the tickling - not stopping when she clearly needed to breathe, telling her what he's going to do (assuming it wasn't a teasing kind of telling, and even that's a little sketchy), or restraining her with any effectiveness, then it would be creepy. If other people have different boundaries about this kind of thing, that's fine I just wanted to point out that there are situations in which the actual physical details described might not mean anything bad at all. But the subtext does.
Also, I think that Gavin de Becker's Gift of Fear is a fantastic book.