Conclusion
Timmy was indeed a very bright young child with his "B" grades, even though he was out of class, or in trouble during the major portion of every school season. And his understanding of the motivations for the trouble that he was constantly in only further proves this fact.
He was also a very incisive child, seeing aspects of himself and his parents that they chose to be blind to.
At first, they wouldn't even accept the advice of their child's analyst that they be with him and supervise his activities as often as humanly possible thus showing that they were extremely selfish individuals.
But when they were told outright that it could be proven that they were directly responsible for any further delinquent behavior, they began to come in for analysis as well.