When the term "abuse" gets misused, it cheapens the sense of urgency for victims of true abuse.
A child overhearing noises in the next bedroom is far far far from anything that could be termed "abuse". For all you know they weren't even having sex when the noises were heard. For all we know the woman may have been doing her morning exercises or moving furniture to sweep up dust bunnies. Even if it was sex going on, this a normal act of life that should not be traumatic. Use it as an opportunity to explain sexual relations at an age appropriate level.
As long as reasonable attempts are made to keep it private, there is nothing wrong with a situation where the activity is inadvertantly detected. Besides, sex isn't exactly a quiet, subdued pasttime. Sometimes it gets a little more heated as you get into it. Hey, it happens. They're human beings and it was unintentional.
If the child was old enough to know that it was sex, then they are old enough to understand that it happens between a man and a woman. There should not be any trauma associated with it if it is handled right.
I'm sorry about what went on with your stepdaughter, but I would not assume that the biomom is to blame for being too loud or whatever. Some believe that when young kids act out sexually it is not from premature exposure to sex, but because of their own natural feelings that they don't understand which are suppressed, condemned or punished by adults, rather than explained and dealt with in a balanced way.
Personally, I am more concerned about the threats of violence, but that could be taken out of context. Some parents are kind of loose with that kind of talk, but the kids know they never really would hurt them. Saying "I'm gonna whoop your butt" but never actually doing it, becomes just another way of telling the kids to behave. I do not approve of it myself, but it can be a matter of parenting style.
The foul language is also something that I object to, but again this is a matter of parenting style. I have a pretty clean mouth, but I have slipped and had my kids overhear bad language at least twice. They are going to hear it a lot in their lives. Some parents would tell you that there is nothing wrong with any word and nothing wrong with sex. It is a matter of opinion. Did the kids repeat the words verbatim? If so, they probably already use curse words.
Hey, I'm not saying this woman is Mother of the Year material. But to call her an abuser who needs to have her contact supervised is going way overboard. Both kids need to be sent to their mother as the court has ordered it.