I've been told there are some hunter-gatherer societies in today's world where people still don't make that association. (Though that could be an urban legend - don't quote me on it.)
I agree on both your points. Anthropology doesn't have a very good track record in recording the culture of "isolated" tribes. But in a society where everyone had sex, it would be pretty difficult to associate it with babies.
But pretty difficult to forget the association once figured out.