Absolutely NTA.

Firstly, the child shouldn’t have been rummaging in the bin, let alone the bathroom bin. Your cousin’s only response should have been to correct her child’s behaviour.

Secondly, periods are not dirty secrets and your wife was completely in the right to explain to the child what it was, especially considering he asked. Surely the child, being 7-8 years old, will learn about periods in school in a year or so anyway? I remember having the period talk in school when I was 9. Regardless, periods are a normal and sometimes essential process of our body and her child is now aware of something perfectly normal that he would soon learn about anyway.

Your cousin is TA - it’s 2022 and she needs to get over herself.