My kid (now 14) has worn reasonably modest 2-piece swimsuits in the past. When Hubby and I first got together she wore a 2-piece that was maybe a little smaller than I would have liked (she was 5 and it was given to Hubby by someone else, second-hand). When she outgrew that we bought her modest one-pieces and modest 2-pieces.
I agree that it depends on the age. Now, I don’t think it is EVER appropriate to have extremely short-shorts or dresses that go much above the knee, even on a child, or to have your baby running around naked in public. But I do think that at home, it’s okay if your little one (say under the age of about 2) wants to run around naked or for children under 7 to have a bath together. Little children don’t understand about sex, nor do they need to.
I am a woman and the oldest of 6 children. I have 4 younger brothers and a younger sister. My youngest brother was born when I was 9. I knew how baby boys looked from small on. I knew that boys and girls were made differently. Never bothered me.
For the record: in the past, all babies wore long skirts (boys and girls). The skirts were “shortened” (literally) when they started to walk. When they got a little older, boys started wearing shorts. They didn’t wear long pants until they were grown up. Girls started wearing knee-length dresses. As they got older, their dresses got longer, a little at a time. Once they were in their early to mid teens, they started putting up their hair as well. A woman who was eligible for marriage would have floor-length skirts that didn’t display her ankles (it was considered immodest to do so) and would wear her hair up on top of her head.