Hi L.,
I'm not an expert, but at this age, I believe they are just curious about their own bodies. I don't think she gets our concept that it's gross to do that, because it's not sanitary. For right know, I would wash her hands every time she does it. It's going to be a pain for you, but she may get tired of having to do that every single time.
Have you tried to let her go bare bottom for a while? It may help with potty training. Every child is going to be different, and being afraid to go on the potty is not uncommon. I think they feel they are losing something when we flush. I always taught my kids to wave good bye when they were done and then we flushed!!
I hope this helps somehow!!
Wishing you the best!!
P.