It's real, but there's important context that doesn't really help.
Meliodas (who was ~300 at the time) was cursed so that he'd eternally resurrect whenever he died, effectively making him immortal.
Elizabeth (Meliodas' 3,500+ year old lover) was also cursed. But, instead of resurrecting, she would reincarnate, lose her memories, fall in love with Meliodas, and then die within 3 days of regaining her memories.
Elizabeth died 106 times over the course of 3,000 years. The baby (who's 16 by the time of the main series) was the 107th reincarnation of Elizabeth, and Meliodas wasn't planning on grooming her or anything weird. He was just extremely overprotective of her.
The reason why this doesn't help is that Meliodas is already a sex offender within the first 5 minutes of the show.