The main part of the title is fairly straightforward. This is the story of a handsome drowned man and the impact he has on a small fishing village. The drowned man is the focus of the tale; so he gets the focus of the title. The subtitle, however, is not so straightforward. Is this really a tale for children? One interpretation, though not a very popular one, is that yes, this is just a tale for children. Márquez wrote it for parents to read to their kids before bedtime, and that's that.
It's far more likely that there's more going on here. The themes in "The Handsomest Drowned Man" are by no means childish or simple, and there are big ideas to be considered by all ages (see "Why Should I Care?", or tell us what the big ideas are). So it could be that the title is ironic; it may seem on the surface like a tale for children, but it's really not for children at all.
Another way to approach the title is to think about what the story has to say on the topic of mythology. On the one hand, myths are bedtime stories for children, ("and then Santa comes down the chimney…"). On the other hand, all throughout history, adults have embraced myths as ways to explain the unexplainable. In "The Handsomest Drowned Man in the World," the adults of the village speculate that the drowned man is any number of ancient mythological figures. Myths force us to suspend our cynicism, and to believe in the fantastic; so maybe myths make children of us all.