I guess part of the problem is that it's not always obvious when the bus sails by, whether the buggy area is full or not - and what gets priority there. What about those with luggage (e.g. heavy cases that can't be easily lifted into the bigger racks)? Should someone fold a buggy to let a suitcase like that on board?

When the bus is quiet (or where there are multiple kids in the buggy), then let them stay open but people should be aware that they might need to fold them - particularly if another parent is about to be denied getting on.

Seats-wise, I'll give a seat to someone who is folding their buggy and now facing holding a child. I don't see why someone should give up their seat so someone can sit and watch their child in the buggy.

One thing that does get my goat though is when, on a busy bus, you see toddlers sitting in a seat of their own while paying adults are standing. Yes, there are occasions where their mother is pregnant or the accompanying adult has multiple bags on their lap etc and that's fine. But I'm pretty sure it used to be more common to have children on laps when there were few seats left and let others sit down.