When kids learn about bodies

Recently one of my preschool boys was using the bathroom and I had to be in the bathroom also to help another boy. Boy #1 looks at me and says, "Miss Ammie, You don't have a peanut". I agree with him and say that he is right- I don't have a peanut. "But I have a peanut."

Also this week- a preschool girl has a doll up her shirt. This happens a lot in this class because their teacher is pregnant but today I noticed that the doll us higher up on the chest and the girl is giggling like mad. I ask her what she is doing and she shakes her head and won't tell me. I am sure I know what she is up to but I want to hear what she has to say about it so I keep asking her. Finally she says, "She is eating off my boobies." 

How do kids learn the things they do???