That isn't a drag show, I'm not sure what that is. Drag shows can be made appropriate for kids, if they limit the content. (i.e. a person in drag singing popular songs is fine).
The kid in the video was in someone's (probably his mom's) lap. Many Karen's act like "kid free" can't possibly include their kids, and bring them anyway. And many parents ignore warnings that stuff is not appropriate. Deadpool had an R rating, and Ryan Reynolds even said in interviews that "if you take your kids to see this, you're a bad parent." People still took their kids to see it and complained.
My point is that without the context we don't know what story this video is telling.
This looks like a wedding or a bachelor/bachelorette party where this weird strip tease is meant as a joke to embarrass the groom. And given the set up, and the lack of other children, it looks like it was supposed to be a child-free event.