The video in the still is a parody of the videos you are talking about. The real ones are not as graphic.

It is basically some guy in Kazakhstan who makes shitty kids videos to get millions of clicks and make money on youtube. The trick to maximizing profit is to have really long videos because more commercials will be played, making more profit. Most kids don't even watch the whole thing but once it is clicked it just plays the 40 mins.

They feature shapes, toys, and colors that are appealing to kids. Much of it is computer generated claymation featuring knockoff superheroes and Disney-like characters. He has like 8 people and him and his crew put out HOURS of this stuff each and every day. Some of them are indeed kind of weird, but it is honestly just because they run out of ideas working all day long and Khazakastani humor is not the same as things westerners find funny. Sometimes the characters fart or burp, but that's really about it.

Of course like anything on youtube that is weird it has kind of a following by hipsters that like it because it is so bad. Like Mystery science theater or rocky horror picture kind of stuff. They then made very creepy parodies that are being conflated with the original videos. I suspect that even the "moral panic" surrounding it is being done for the LOLs. It's a meme.

Sorry to ruin OP's fun if he is actually the one trolling. If OP is genuinely concerned, you can relax. Nobody is corrupting your kids. It is mostly infants that are given I-pads to play with. They press colorful shapes. That's the extant of what they experience.

TL:DR: This picture is just a parody of videos made by this russian guy that has figured out how to make truckloads of cash on YouTube by producing shit-tier kids videos that are weird but not really inappropriate. It's like tele-tubbies but crappier.

Your kids are fine. If I can find the article I read that explains this meme I will link it, but this is a total nothing-burger. Chill.