When my son was 3and a half years old, he came home from daycare telling that a boy had gotten in trouble for saying a bad word.  

I said, “What did he say?”  And my child looked at me me like I was stupid.

“I can’t say it.  It is a bad word.”

“Well, you aren’t saying it as a bad word. You are just telling me.”

He cut his eyes at me like he wasn’t sure I wasn’t setting him up for trouble and lowered his voice. Mind you, there was no one else in our house.  

“He said the s-word.”

“Shit?”

At this point, he was totally exasperated with me. 

“No, Mom.  He said,” and his voice dropped to a whisper, “‘shut up.’”

He didn’t understand why that cracked me up.  But, I did agree with him that “shut up” is a very rude thing to say.