Try not to worry, you are protecting your 4 yr old. Just don't let him bath with the older boy.
My child did the same. The state I lived n didn't do a thing and even under close watch it kept happening. Go to ur pediatrician get him in therapy .there is a reason he did it. Better safe then sorry. I found out my child had been messed with by a older child she knew. She is so much better now since as a family we took. Care of it and didn't ignore what was going on. Trust me for your children.
In the first place, don't get upset. This is not perversion. However, don't let them shower or bathe together. And don't make a huge fuss over the incident. You could tell them it is not a polite thing to do (if the subject comes up again)..
I think that extremely close supervision when the boys are together is in order. Address any inapropriate behavior immediately, and do so with firmness, and love. I am a mother of four. I recall that when the kids were very young, they simply did not know better than to be curious about each other physically. I definitely recall catching one of my sons trying to kiss and touch his sister. They were 5 and 4 at the time. I immediately sat all the kids at the kitchen table. The other two kida were 6 and 7 at the time. This was my speech: "I love all of you very much, and none of you are in trouble. No one will be punished. I need to tell you something that is very important, so please listen. No talking. I will talk, and you can ask questions later. Your Daddy and I love each other very much, and that is why you see us hug and kiss sometimes. We hug and kiss you, too, because we want to show you that we love you. The thing I want to teach you now is that it is not okay for brothers and sisters to touch each other unless it is a kiss on the cheek or a little hug. I understand that you are curious about how people look and feel under their clothes. All you have to do is ask me or Daddy, and we will tell you. Any questions?" That speech seemed to do the trick, and the kids began to come to me one by one to ask things like what boobs were for and how girls are different from boys. I suggest you try this. - Blu