That it is an ad for a brothel wouldn't be something children would notice, and the concept of a brothel isn't something they would comprehend.
As such, it isn't problematic for the children as the image itself isn't harmful and they are shielded by their blissful ignorance from knowledge beyond... or should be.
Um, of course they would notice it.
They might not know what exactly it is but they would certainly notice the women in their strange clothing.
Is it harmful? Personally I don't think so though I do think it's inappropriate to have in front of a school. If not for the children definitely for the parents.
I remember being 7 and asking mom and dad what the XXX was in front of the particular movies that had them.
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