Um, I agree. Kids of this age need supervision and it shouldn't get to the point that they play games like that. There is a wide range of normal, but I would tell her we do not do this----- period. Play a game with them instead.
Make sure she is supervised when playing with other children at this age an adult should be around anyway , it may be a good idea to tell her NO I doubt if the parents of the other child will think its okay .