"Bless" used alone is a British and Irish exclamation showing fond pity, similar to "aw, poor thing." "Aw, bless" when seeing someone embarrass themselves means "how sweet but a bit pitiful." Not concerning, just affectionate slang. Sometimes used sarcastically. If your kid uses it constantly, ask them where they first heard it, not to police their speech but to understand which online community they are in.