Read first, or watch first?
For a younger family, Muppet Treasure Island first is a completely legitimate move; it's the on-ramp, and it keeps enough of the real plot to count. The book itself belongs to confident readers around grade 5 and up, and it earns its place: the danger is not pretend and the tension is real. Save the 1950 Disney film for after the book, when your kid can hear for themselves where every movie pirate they've ever seen came from.