Be very, very careful. It's not KRACK that is the problem, it is a lax attitude to security and privacy in general. So called "smart" consumer products can often be hijacked, accessed from the internet, or monitored. As a customer, it is hard to know if any specific product is safe or not.
The Norwegian Consumer Council has been on the case for a while, and produced a few horror stories. From a report, aptly titled #ToyFail, on three "smart" dolls:
Furthermore, the terms are generally vague about data retention, and reserve the right to terminate the service at any time without sufficient reason. Additionally, two of the toys transfer personal information to a commercial third party, who reserves the right to use this information for practically any purpose, unrelated to the functionality of toys themselves.
[I]t was discovered that two of the toys have practically no embedded
security. This means that anyone may gain access to the microphone and speakers
within the toys, without requiring physical access to the products. This is a
serious security flaw, which should never have been present in the toys in the
And from an other of their reports, again aptly named #WatchOut, on "smart" watches for kids:
[T]wo of the devices have flaws which could allow a potential attacker to take control of the apps, thus gaining access to children’s real-time and historical location and personal details, as well as even enabling them to contact the children directly, all without the parents’ knowledge.
Additionally, several of the devices transmit personal data to servers located in North America and East Asia, in some cases without any encryption in place. One of the watches also functions as a listening device, allowing the parent or a stranger with some technical knowledge to audio monitor the surroundings of the child without any clear indication on the physical watch that this is taking place.
And the FBI agrees:
Smart toys and entertainment devices for children are increasingly incorporating technologies that learn and tailor their behaviours based on user interactions. These features could put the privacy and safety of children at risk due to the large amount of personal information that may be unwittingly disclosed.
So unless you have a real need (other than "this is cool") for these kinds of products, I would say that your best approach is to simply stay away from them.