Kids finding out and experimenting sexually is normal. It might be that those cousins were to young to understand the taboo that we put on this kind of behavior. Just because they were preteen does not mean they understand the concept of incest . In some cultures cousins are allowed get married. We know that it could be a problem with the children of such a union. Our taboo on that is not so much a moral issue as one about birth defects and the health of the child.
i think your friend A has a long road ahead of her. She needs to except her daughter being gay.