I originally posted about this song, and really about its video with 45 directors, more than three years ago.
I stated that the word "picolé" loosely translated to popsicle in English, although a picolé tends to be alcoholic. I also inferred that the song might not be about popsicles. Mostly because I didn't want to overtly make a sexual reference - and I still don't.
What I did NOT say is that this was part of a larger effort, from their album Tropical/Bacanal, to move away from the funky sound of With Lasers and into a sound that more represented their Brazilian roots. They did so quite successfully and to great critical acclaim.
Also, this song is really, REALLY dirty. Yes, it is about exactly what you think it is. If you can't figure it out from the video, I can't help you here.