Is it ok to have a TWO YEAR OLD in the delivery room?

my sister had her two year old in the delivery room and she watched EVERYTHING. She was scared and crying. then she started becomming fixated with the genitalia on her toys and acting out with herself by trying to put small baby dolls INSIDE her own vagina. she was a perfectly normal child until then. does anyone else think it's wrong to have a two year old witness childbirth?