There was a similiar question to this posed on another thread, in which it was pointed out that the behaviour need not be sexual, and that lots of thinking about context and meaning was probably necessary. It looks appalling, but needn't be (it might be, just can't tell).
That thread also pointed out that it would typically be the boy putting penis in mouth who caused alarm, not the gril licking. You might consider asking your friend in the spirit of enquiry-seeking to find out why and what, not accusing her daughter of innappropriate behaviour, and bear in mind form her persepctive her daughter may be seen to be being abused.
You have the advantage that your DS wasn't directly involved, so could possibly find out from him what was going on before asking or, if you felt uncertain, contact Social Services and ask advice. But, before doing anything, satisfy yourself that there is a real sexual problem, or that you are simply unequipped to find out, because otherwise you risk making a whole group of children feel that their play might be wrong for reasons they don't udnerstand, when a simple 'we don't do that' might work better.
I know it sounds creepy, but there were very sad stories on the other thread of children who had become entirely introverted because of an investigation into something that was not really odd-if you don't know what sexual behaviour is, you'll do sexually odd things.