From the Second Life Wiki
Why play a child in Second Life?
There are a great many reasons to play a child within Second Life, and it is plenty likely that every person playing a child might have their own reasons. Here are six.
1. A way to recapture some of the spirit of youth. Much like the old Twilight Zone episode, "Kick The Can," it allows one to 'be' a child, and run and jump, and play unencumbered with the responsibilities of adulthood.
2. "Re-imagining" bad childhoods. Many SL kids have faced childhoods filled with illness or disability. Many (by no means all) were victims of sexual or other abuses as a child, and this is allowing them to "rewrite" some of those childhood experiences with much healthier ones.
3. Related to the above, many may also want to have childhoods they could not, with all the toys and goodies they may have been denied for some reason. Always wanted that Easy Bake Oven? Go buy or make it in SL. Want the big swingset, or a pony, or whatever? All yours for a few pennies.
4. For fun. It can be a fun type of character to play, allowing for a childlike innocence and whimsey to come to the forefront, and providing for many opportunities to be "silly" that might not otherwise feel comfortable in an adult avatar.
5. A few may feel more comfortable in the role of a child, for whatever reason. While some of these might fall under various "philia" subsets (adult babies, for example), not all do.
6. Some may simply enjoy the roleplaying challenge of playing a kid, which isn't always as easy as one might think.
7. Some avatars may specifically create a child avatar to "escape" from the sexual content in other areas of Second Life. This may include victims of RL child abuse or it may not.
https://wiki.secondlife.com/wiki/Child_Avatar