I haven't noticed this before but I've also not played a "legacy" game before now either. In this game save, I started with a mom, a dad and their toddler girl. The mom and dad then had a baby boy. Now the girl is an adult with a husband, a girl toddler and a girl child (this family is set as unplayed). The baby boy is now a grown adult with a husband who had a baby boy, now a toddler (the current primary played household). As another player mentioned, the toddler has a "show toy" option for family members older than toddler but there are no other friendly interactions available for this boy toddler and his extended family. This even applies to his grandmother even though she appears in his relationship panel as an acquaintance. However, he gets the "talk to stranger" option for other NPC characters. Even when I choose the "show toy" option, he just starts playing with the toy. He does not gain any relationship points with the target sim.
Update:
This is a bit long but I did some testing and I wanted to capture as much detail as possible. As I said before, this is my first real "legacy" game. I also thought I should emphasize the boy toddler was produced from the "try for baby" option and aged up from baby while the girl toddler was generated through CAS.
For this test, I removed all mods before starting the game. Also, when I first discovered the issue, the two families had traveled to a park together. I wanted to test the interaction options available to the girl toddler but the boy kept disappearing. So, I had the girl toddler travel to his home and included her mother and the toddlers' grandfather. I used the modify in CAS cheat to switch between the two now "played" households.
The boy toddler still only had the "show toy" option. However, this time, as he was dancing when they arrived, he had the option to invite others to dance. He gained friendship points from his grandfather but not from his girl toddler cousin. Even with those friendship points, the grandfather is still only an acquaintance. The boy toddler had no other options for his grandfather or his aunt, who shows no relationship at all. I had the aunt do the "friendly introduction" with the boy toddler which gave them enough friendship points to show as friends in the relationship panel and the boy toddler then had the normal friendly interactions available. However, he still had no further options for his girl toddler cousin.
The girl toddler was also able to "invite to dance" and because she has the Charmer trait, she had the "share the love" option. When she shared the love with her boy toddler cousin, he pushed her away but, for whatever reason, they still gained a bunch of friendship points. Then, both toddlers had options to babble, hug, hug lovingly, etc.
So, I exited the game and when I restarted I used the fulledit cheat to change the girl toddler's trait to Angelic in CAS. After that, she had no options to interact with her boy toddler cousin. With the girl toddler active, a left-click on the boy toddler cousin generates the menu sound but no menu pops up. The boy toddler, at his home, only had the option "send home" for his girl toddler cousin.
Update 2:
Out of curiosity, I began a new save with no mods. Based on the below, the bug seems rather inconsistent.
The original family was Larry Smith, wife Melissa, son John and daughter Karen.
I moved John out and using CAS, added husband Shaun and toddler daughter Crystal.
I moved Karen out and using CAS, added husband Reese, child son Tony and toddler son Jason.
When John, Shaun and Crystal visited the family. Crystal had friendly interactions available for her aunt and cousins. She had talk to stranger available for uncle by marriage Reese. She had friendly interactions available for both grandparents.
When Karen, Reese, Tony and Jason visited the family, Jason had friendly interactions available for his cousin Crystal. He had talk to stranger available for his uncle by marriage Shaun. He had no options available for his bio-uncle John. He only had the call over option for his grandparents.
After checking all these options, I exited the game and added my mods. The only difference is there were some mod-specific interactions but none of the other available interactions changed.
I'm happy to share the save files if it helps but I need a bit more instruction. I tried to attach the files here, per the QA instructions, and got an error that .save files are not supported. Thanks to all who are working to resolve this!