BACKGROUND: Infantile Amnesia ; A persons inability to remember childhood memories. There have been many theories given to explain Childhood Amnesia. Sigmund Freud’s theories of psychosexual development are highly intertwined with childhood experiences, and Freud’s explanation of childhood amnesia is one of the most controversial. In what is now published as The Standard Edition of the Complete Psychological Works of Sigmund Freud, Freud theorized that childhood amnesia is the result of the mind’s attempt to repress memories of traumatic events that, according to Freud, necessarily occur in the psychosexual development of every child. EXPLANATION : Your sentence says that there is a hypothesis that " infantile amnesia reflects repression- or holding back- of sexually charged episodes", i.e. as I had written in the background, Infantile amnesia is a method used by brain to hold back or trying not to remember instances in one's childhood about psychosexual development. This hypothesis fails to explain some phenomenon that the author is talking about. Read more about psychosexual development here: http://www.reference.com/browse/wiki/Psychosexual_development

It means "episodes with a strong or heavy sexual connotation". Hope this helps.