absolutly be aware this is not okay an older child/teen and a younger child my answer is NO way you allow this ,yes keep them apart or be in the room when they are together , protect your son ...
if the cousin is the same age, I wouldn't worry too much about it. Yes, talk to his parents. Talk to ur son too, explain its not appropriate for him to be watching at his age. I wouldn't keep them apart, they are kids and kids are curious. I wouldn't let them be alone together for awhile though$ I wouldn't worry about him being used as a sex toy either, unless the cousin is a lot older.
YOu have to keep the child away from his cousin since his cousin might use him as a sex toy and tell your son why its not okay to watch porn movies
How old is the cousin? Talk to the cousin's parents, don't let your son alone with the cousin again and watch for signs of over sexualization. Not appropriate and I would be livid. good luck.