Yes, it's correct. Giving it more thought, I agree that the scenario of original article should be prosecuted, barring issues of entrapment, unless the perpetrator understood that it's a fake (and he didn't).
That still leaves a point about such "avatars" being legal if made/bough/sold for recreational purposes if everyone knows that noone is getting harmed. i.e., treating childporn as evil not in itself, but because it's evidence and financing for actual evil acts.
That still leaves a point about such "avatars" being legal if made/bough/sold for recreational purposes if everyone knows that noone is getting harmed. i.e., treating childporn as evil not in itself, but because it's evidence and financing for actual evil acts.