I have two kids. A couple of years ago, when they were 7 and 9, we were watching a movie, I forget which, and one of the female characters was pregnant. Now we have straight friends, we have gay friends, my kids knew of trans people but we hadn't really talked about it at the time, but I realized just how much of a bubble they were in when one asked confusedly "How can she be pregnant if she's not married?". Their knowledge of sexuality went so far as to know that some people have two mommies / daddies and some people have one mommy and one daddy. But clearly this had nothing to do whatsoever with knowledge / explanation of sex.
It really isn't a big thing like some people make it out to be. @fattyflattie - I really don't mean this at all a harsh way but I think you're doing your kids a disservice if you think this will confuse them all that much. It's adults and teens who start getting baggage about sex, not kids.