In chapters six and seven, the narrator’s observations suggest that Margaret has become sexually active aboard the pirate vessel. 

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sciftw eNotes educator| Certified Educator

True.  In chapter 6 Emily recalls a night aboard the vessel in which Captain Jonsen came down to see the children.  He was quite drunk and put a hand on Emily in a way that made her react by biting his thumb. It was likely a sexual pass at Emily.  The entire time this narrative is being told, the reader is also told that Margaret appears to get sicker and sicker at the sight of Jonsen down there with the kids.  

Then Emily describes the next four days with Margaret. Margaret starts avoiding the other children and eventually takes up to living in Otto's cabin.  

"Now they hardly saw her at all: and when they did she seemed so different they hardly recognised her: though where the difference lay it would be hard to say." 

In chapter 7, Margaret's distance is felt by almost a complete absence from the entire chapter. All that is said is that she continues to avoid them and live in Otto's cabin. 

The reader has to remember that the story is being narrated from Emily's point of view. She's a ten year old girl, so the likelihood of the narrator flat out declaring that Margaret is having sex is slim.  But the evidence is there with Margaret's new living arrangements and avoidance of her family.