DD has a similar friendship where they love to hate each other. DS when he was little, I think year 6, said Mummy look at this, then pulled his foreskin back with a lot of questions. I was like woah, why you doing that, a boy in his school was going to the loo with him so showed him and DS tried it. I wasn't happy with what was going on, DH made like I was over reacting.
In the end I wasn't sure if I'd given the right advise, as in I thought you're getting old, if you're a boy do you need to wash it, so checked with DH who was horrified and made sure DS didn't go into the toilets with this boy.
With DD & her friend, they're separated at school, they'll mess about, argue, be the best of friends the 5 seconds later hate each other. I would say from a play date point of view the Mum isn't really adequately supervising them if this happens. Part of me is like oh it's curiosity and innocence, the other half fears how far is he going to take it.
DS was nearly 7 when DD was born, he noticed her bits were different and had questions, but he seemed sated by what he was told.
I was 6 or 7, locally this older kid had promised me his gaming console, money, all sorts, if I'd go behind the garages and show him my bits. I thought I'd really like money and whatever. I pulled my knickers down, the boy who was maybe 13 was like open it up, I didn't know what he meant, so he told me what to do. Obviously he knew it was wrong and I was never going to get this stuff, if I said anything I was told I'd be in a lot of trouble so never did. Now I know that a kid of 13 shouldn't be asking a 6/7 year old to do that. Unfortunately the kid had told his mates who were peaking through a fence, one threatened to tell, I don't think they did as I never got spoke to about it. I knew no better, but the older child did. I felt really dirty and really scared.
I would say to protect your daughter, you need to tell the Mum what's happened, say ok at their age it's innocent, but part of you worries what if it goes too far. What then? So play dates should mean they're always in view of an adult, but with their friendship as it is, what's going on at school, you wonder if they both enjoy time together, when at school you'd think they couldn't abide one another.
See what the Mums response is, she should be on the same page as you, as in ok you know children are curious, but they're not aware of boundaries let's say, Lena Dunham mentioned how she'd coerce her sister into doing stuff. The internet was split over whether this was abuse.
If the Mum plays it down, cancel the play dates. If she mentions any contact again, then involve school.