I do remember this, Sadie, quite well. We conversed at length about it not long after I came on the forum.
It is my belief however that in the case of their being a car in an initial plan and that plan going wrong, walking through the middle of the town with the child would be an unlikely plan B. She would still have to be concealed and I would have thought that going to one of the secluded areas or into a nearby apartment that could have been being used as a base / vantage point would have been a more sensible option over walking through the middle of the town and traversing that road with all the bars and restaurants.
Gawd, Sherlock, when we were there mid summer 2010 it was so quiet. Everyone seemed to go to bed at 9 pm-ish. There are two routes that I can think of that involve virtually no road walking except for crossiing quickly.
The first involves doubling back thru the car parks of A block and the next block in a more westerly direction, then crossing the main road onto semi derelict land.
The main road would have been almost as dead as a dodo at that time of night imo. For its whole length, until the Staff quarters, that wasteland followed the Rua D'Escola, which is the road that the Smiths saw Smithman in . Doubling back might have been a bit tricky.
The second and probably the more likely route is via the rabbits warren of alleyways. There is one that goes in a southerly direction and has an off shoot alleyway going west from behind Fazackerleys villa, number 35, then across Rua Francisco GM right on to the Baptista car park.
From there across another car park, cross the main road and onto yet another car park. Travel across some wasteland which comes out near The Staff quarters and just up from where Martin Smith saw him.
Apart from crossing two almost deserted roads, it is all alleyways, car parks and wasteland. No-one to see him until he had the misfortune to bump into the Smiths
As for Madeleine being asleep, it seems likely that she was drugged initially with chloroform and later possibly with a measured injection.
All this is conjecture of course, but entirely possible.