How do you know it only happened twice in 7 months? I guarantee it's happened more then that. The child just hasn't been caught every time.
Well, if it was deviant behavior I think it would happen more than twice every 7 months. I do think it is kinda normal for this age. You always wonder whose idea it was and who was tagging along. It could be a part of ADD. It could be two guys making another guy feel like an idiot. I would definitely remind him that just as he should not be showing his privates, you don't ask another to do that. I would think the fact his PE teacher noticed would be enough to quash this in the future.
Have you talked to him about the Birds & the Bees yet? It seems like they just think it's funny, which I don't get at all. My 5 & 6 year old were doing the same thing as well as ther 5 year old step brother. I got this great book called "It's NOT the Stork" by Robie H. Harris, sat down & read it with them, once they realized there private were PRIVATE they stopped doing that.