Here's some information and tips based on the American Academy of Pediatrics (AAP) Healthy Children website
These behaviors are normal and adults should try to redirect children to more appropriate behaviors. Simply remind them that these are private activities
Some sexual behaviors may be “red flags” rather than harmless curiosity. And may indicate sexual abuse or exposure to sexual activity:
See https://www.healthychildren.org/English/ages-stages/preschool/Pages/Sexual-Behaviors-Young-Children.aspx for more