Probably a very unpopular opinion, but I don't see a lot wrong with that "family friendly drag" poster.
Kids wanting to dress up in opposite gender clothing is fine. Boys wanting to play with makeup and dresses is fine. If the kids want to put on some fun clothes and makeup and have a dance party on a runway, that's all fine. I think it's good to allow kids to experiment with different ideas and identities, WITHIN LIMITS.
The problem is when it becomes sexualized, linked to sexual preference, exploited, and pimped out to the media. I know that drag was originally a sexual, raunchy, burlesque performance in its origin, but if we're going to allow "drag kids" to be a thing, of course all of that must be removed. In this one particular case I don't see anything sexy or raunchy about it; in fact, the event specifically labels itself family-friendly.
Those kids all appear to be wearing age-appropriate costumes and smiling, not like Desmond's dead-eyed grimace either. If you put "Halloween Parade" on the poster, nobody would be the wiser. Half of the makeups just look like face paint.
tl;dr: if a "drag kid" event just consists of happy, healthy kids dressing from the opposite clothing section at Target/Spirit Halloween and walking on a runway or dancing around a little, I don't see an issue.
edit: maybe it's the term "drag" that's an issue. Leftists love making up new words, maybe they can make one up for non-sexual kiddy "drag".