I've got a few different groups of 'mummy friends' and I'm genuinely intrigued by two different group's reactions to their kids playing 'doctors and nurses' and taking their clothes off.
One group actively don't discourage this type of behaviour; there's often a scenario when parents are downstairs, kids upstairs and someone pops up every so often, then comes down saying that they've all got their trousers off and it's all very natural etc. Also, talk about x measuring y with his willy also very relaxed.
In another group, one of the kids came into the living room naked from the waist down saying that z had asked to see his willy, and the mums responded by (gently) saying that we don't do that and you must tell me if you asked that, and we keep our clothes on when we're playing.
At the moment, dd hasn't been interested in these games and I don't have a planned response but will come up with something on the hoof.
What approaches do others use?