YANBU
it might be a generational thing, but it's still not OK. I have the same issue with my GM in her 90s.
When DD was tiny she said something about her 'flirting'. It made me uncomfortable, but I figured she didn't mean it in the modern sense, language evolves, she meant she was looking particularly cute, etc etc.
Recently she said of now 2yo DD 'oh she's flirting with her uncle 'X' (my DB). again I was uncomfortable and laughed awkwardly, thought oh no, not this again. And then she said really seriously 'they do, you know. Little girls. They start wanting to flirt with men when they are very little. They love men. Watch her, you'll see.' 


I had this spurt of anger, then I realised that this is probably her mother talking. She was an evil bitch. She banned my GM from being alone with her lovely DF from the moment her periods started, screamed at her and beat her when she 'caught' her hugging her DF. Many many other instances of full on batshit that I won't go into.
So I didn't and won't say anything. Mostly because she's not capable of dealing with it. But in your situation I absolutely would say it's not the sort of thing he should be saying and please stop. I wouldn't however jump to there being a sinister motive.