My wife and I are having our first child this July and a conversation that we have now and then is the prospect of having sex with our baby in the room.
I've read other questions related to this topic but I have found all answers to be inadequate...
Here is my position:
Children of ANY age are unharmed by the awareness of their parent's sexuality and sexual activity if the parents age-appropriately explain how intimacy goes along with their lovingly committed relationship.
Here is my rationale:
I am of the opinion that parents are best positioned to talk to their children about sexuality because the children trust their parents. In the context of trust, talking about how two people who are committed to each other also physically enjoy each other will make sense of the parent's affection and sexuality. If the parents are concerned that the child may be misinterpreting the sounds coming from the bedroom as violence, the parents can easily clear up the confusion by explaining it as the noise they make when experiencing the pleasure of love making - which leads to my second point.
The earlier parents communicate with their children about sexuality, the less likely the child is going to explore their curiosity on their own. There are a ton of YouTube resources* to demonstrate how sex leads to childbirth that are very academic. Guiding your child through how sexuality functions will deter your child from "playing doctor/mommy-daddy/other euphemisms for sex" games with their peers. If the consequences of sex is appropriately explained, children will be less likely to "play with fire."
Children who grow up knowing that sex is natural, pleasurable, and good in a committed relationship will be much more prepared to protect themselves from being taken advantage of AND they will be more equipped to deal with their emotions if they tragically are taken advantage of. Children who are aware of their parent's sexuality and its expression will be able to develop a framework for how they will personally experience their own sexuality.
What I'm not saying:
I'm not saying that you should flaunt your sexuality in front of your children or invite them into the intimacy you share with your spouse. The framework should be one that establishes that sexuality (as well as bathroom nudity) is something that happens in private; that sexuality shared in an intimate relationship strengthens bonds and affections; that sexuality has powerful consequences both chemically as a couple and physiologically if a life is conceived.
I'm not saying that there is no risk of harm. If you fail to navigate the issue well, I would not be surprised if the child grows up and has strange sexual proclivities, is unable to "unsee" what is seen, and needs therapy sessions to talk things through with a professional.
*Here's a YouTube video which beautifully explains how conception works with graphics appropriate for children: https://www.youtube.com/watch?v=BFrVmDgh4v4
To restate for StackExchange purposes: What's the harm?