Panel 1: Mrs Grunion turns around in her seat and tells the kids to listen up as she tells them that there'll be no talking, standing up or changing seats on HER two hundred foot long bus.
Panel 2: She then says that if they obey the rules, they're golden but they can kiss Life As They Know It goodbye if they give her a hard time. Yeah. Right. They'll have to write her a letter of apology that promises no further bad conduct and bring home a warning note to their parents about what they did and what she'll do if they do it again. Since Lynn is crazy rampage nuts, this is the Worst Thing EVAH!!!!
Panel 3: She then says that they can't think that she doesn't know what's going on back there because she's got eyes in the back of her head, see.
Panel 4: Our attention is drawn to the fact that we see her eyes in the rear view mirror; this implies that her knowledge of what's happening is not so mysterious after all.
Summary: This sort of thing tends to confirm my suspicion that Liz and the other kiddies are mostly reacting to her stern visage and threatening tone of voice and less to what she actually does.