Ok let's split this into two parts.
The actual game, was not made necessarily for children,especially not for young children. Age rating is 13/14. Since it used to be paid for and only accessible on PC, small children can't exactly stumble upon it without a parent's permission. The game is a jump scare/chase game. Huggy wuggy chases you around the room as you try to solve the mystery. If he gets you, yes he eats you and you die,but there's no hugging,whispering, or anything like that. In fact, in chapter 1 he doesn't even have a voice.
Fan made content. This where the issue actually starts. Roblox look alike games,tik toks,youtube videos /songs. Anyone can post something on there, age ratings vary, some users might post their content as not suitable for children,some might not. That's where parental controls and supervision comes into play. Yes there is a song, with all the creepy stuff, but the guy posted under "not suitable for children" . What other people might do with that content, what settings kids have on their devices,what users search for ... that is not under his control.
It would be like posting a song about nanny plum fucking old elf up his arse with her magic wand and using jelly,jelly but not a lot as lube. That doesn't make Ben and Holly inappropriate or evil or lewd or corrupting children. Doesn't make me evil either, just possibly twisted...or drunk. If it goes viral and other adults/teens pick it up and make their own content, I can't help that. It doesn't make them evil either, just because your 6 yo heard it and now fancies some jelly.
These fads come and go, the more the adults make a fuss, the more curios kids become, the more forbidden it becomes,the more searches,gossip,interest and "ohhh aren't we so grown up and cool because we know about it?". If any children are being harmed ,that's because adults react hysterically and with shock/horror instead of having a chat about appropriate games,language etc.
When momo was a thing , there were very few kids that even knew about it ,much less mention it. School(stupidly) sent a letter home and in the next few weeks, a third of the kids were spreading rumours and exaggerated nonsense about it, a third insisted they saw it and reenacted stuff,tried to draw it and a third was fucking terrified and crying. Two more weeks and no one even remembered it, suddenly this internationally spread, horrific ,scary thing just went poof! and disappeared. 🙄