I know this is an Old Post, But i was doing some research on the topic as it recently came up as an issue on a Sim that i work - On Reviewing the TOS and a variety of other Blogs and Post i found this interesting Snippet
What are Linden Lab's policies towards Child Avatars?
The only material in the Linden Labs Terms of Service pertaining to child avatars is found in section 6.3(viii) of the Terms of Service. This prohibits sexualized situations involving child avatars, also known as "*****." This is further detailed in the ***** Policy, found here: Linden Lab Official:Clarification of policy disallowing *****. At this time, there is no other content in the ToS pertaining to child avatars, such as prohibitions on general use, violent or graphic content, or language.
Policies towards child avatars are largely focused on the actions of the avatars, not the avatars themselves.
Child avatars are allowed within Second Life. A child avatar, even within a mature or adult region (but not participating in adult (in this case, sexual) ) activities is allowed. A child avatar is allowed do everything any other avatar is...
Note that child avatars are allowed on PG, Mature, and even Adult public parcels, provided with the latter that they are adult verified. Note that this does not necessarily apply to private parcels where one has the option to eject or ban as desired. The allowance of child avatars on adult rated land such as Zindra does not invalidate any of the above rules.
This was Located under the Title of - What are Linden Lab's policies towards Child Avatars - In the SL Wiki
There is a lot more, this is basically the Highlights in that section
I hope this is Helpful to People
Ok The Post blanked out some of the Text - Didnt know it would do that
"*****." = Age Play