Young kids doing adult things...?

I am babysitting and the little girl told me about how she likes to scrub her body(meaning her ) and the boy will "ride the horsy" while things. When they were supposed to be taking a nap, I walked into the little girl's room and I think that she was her pillow and blanket but she got up right away when I went in. Her dress was unoned. She told me that it feels really really good when she scrubs her body. I find it extremely hilarious, but is it normal at this young of an age(girl-5 boy-4). I just told them that they can do it but that they need to do it when they are alone. Did I handle it right?