See this
I have a 2.4yr old so I might just not know what the average 3 year old is capable of. Yes, they might know rude words for bit of the anatomy, they might well know that there are bits of other people's body you just don't mess with and they might decide to flout that. They might even have come across porn or overheard adult conversations with sexual content and then repeat them. But honestly, is that sexual misconduct? Seems an extremely heavy handed way to deal with toddler misbehaviour.