I wasn't sure what we were going to do about it. The post-digging kid started to try and dig out the rock, but it went really deep. We decided it was better to leave it. Luckily for me David is a genius. He suggested putting in a stringer, like we did for the vertical board fence. I bought braces and we cut a small section from an extra 4x4 and braced it to the retaining wall post.
Then we used small pieces of 1x4 to attach it to the side fence.
The view from neighbors' yard:
Not bad, right?