Weird parenting

I have 7 kids and one is a boy and my sister has a one daughter. She says he can’t play with her daughter only my girls can play with her because she doesn’t want her kid playing with boys. Is that wrong or is it just me ? I understand why she fell that way because she is a first time mom and the world terrifies her which I told her to stop reading about stuff and take a break from social media because she literally wants to keep my niece in a bubble. She doesn’t want her kid to play she watches her like a hawk even when she plays with my girls. She says she doesn’t want her kid to be “influenced to inappropriate behavior”. I said Honestly no parent does but we cannot live In fear and when she starts school and grow older there’s no way you can protect her from everything. I told her the best she can do is TEACH. Teach and guide her to be a leader , aware of things and safety precautions. She says to me “this is why your children gonna turn out weird and be like exposed to bad things ”. How am I wrong ? Please tell me what’s wrong with a 2.5 year old playing with other children ?