LOL. I had the same experience, listening to my 4 year old twins argue with each other in the car about the "S" word...
Twin 1: You don't even know what the S-word is!
Twin 2: Yes I do!
Twin 1: Then what is it?
Twin 2:I'm not gonna say it...it's BAD!
Twin 1:I bet you don't even know it
Twin 2: Yes I do! But it's really really BAD!
Twin 1: OK, if you know it...then what is it?
Twin 2 leans in close and whispers....."Stuuuuupid"
When we arrived to pick up our daughter, Grandpa rather sheepishly said, "Your daughter learned a new word....
It took us a few days to get her to stop saying "dumbshit"