It is fun and OK to do. If it is a true regressive symptom, then punish it the usual way. If they are playing baby, ignore it. The many things they do every day you have to decide if it is true regression or just playing baby. I tried to give examples here.
People bring presents for the older child when they bring presents for the baby.
Actually I do not recommend this so let me explain. I think you should be fair with your children and if you take one out for ice-cream you take them both. But there are times when you do for one and not the other. Birthday parties are a good example. If you have a party for one you typically don't give presents to all the children.