I showed it to some friends and after the introduction "You are a princess in Larion, a knight approaches..." the first thing one entered was "fuck the knight".

It's not necessarily because the person is trying to be sexual for its own sake. That's a good test as to how constrained the system is. Commercial systems (such as video games) often lock out any sexual actions (at least the systems not specifically made for that purpose), or constrain them to a fixed set of times and or circumstances. Immediately using a sexual situation has the dual benefits of testing how flexible the system is, as well as seeing something somewhat new and novel.