This is so normal for this age. "That's private, only for when you're alone in your bedroom or in the bathroom." If you make a big deal of it, they're far more likely to push the boundaries for a reaction. And they're probably going to do it anyway, so you're right that shaming isn't the way to go, even if you or your husband are uncomfortable. https://www.mottchildren.org/posts/your-child/masturbation-and-young-children
There’s likely a lot of different ways to go about this, but most importantly you and your husband being together on how you’re navigating it is the main thing, as you mentioned. My husband and I have been teaching “we only touch our bottoms for cleaning”. Sometimes we give examples of when and how like wiping after potty. We are very mindful of our tone too.