"I think that if the children listening were old enough to get the joke then they'd be old enough to laugh it off, and it just seems to be over protective parents getting worked up over nothing. If the child isn't old enough to get the joke it won't even cause a problem as it won't offend anyone."
Come on, this says it all. Parents say that children shouldn't 'know it'. It's like when they get to the legal age of having intercourse, then they've never heard anything about it, not even innuendos.
And yes, if they're old enough to understand, they probably already know a lot more about it, and laugh it off.