I talk openly with all my kids about drinking and drugs. They drank, they smoked cigs and weed. Talk and jokes about sex were and are common. They learned very early on that sex is fine but it HAS to be safe, no matter what the circumstances. They have learned to experiment responsibly and none of them are drinkers, smokers (1 vapes occasionally with me) and the only one that ever uses weed does so only with his friends and only in extreme moderation.
The first has his degree and is FINALLY about to get out of the house and the second is about to get his. The rest are all on their way.
I really believe that children need boundaries that are stable, I also believe the boundaries have to be wide enough to allow children to experiment, take risks and to fail.
I have to add that my children do not have it so bad.

The oldest just got purple streaks put in her hair yesterday. I welcome them to express themselves freely and safely. We are also very open about sex and drugs. My 13 year old has a mouth that won't quit. She informed me a couple of years ago that she had new words for penis and vagina. They were exactly what you are thinking! I am laid back and know that kids will be kids, but I really do try my hardest to keep them on the right path. I have to make sure that my 13 year old is a positive role model for my 5 year old. It is tough sometimes! But, hey, who said parenting was easy? lol My 13 year old looks 17 and that doesn't help either. She is 5'9" and stunning. No one belives that she is 13. She gets lots of attention from older boys, not knowing how young she is. I spend a great amount of time making sure she knows that she needs to respect herself. The attention can be overwhelming and tempting. I may be a little more laid back if I had boys....maybe

Sorry for the long post but I guess the point was, strict rules are not the only way to produce healthy and happy children.