I have already made a theory as to the origins of the baby and the point of the baby.
Here is my theory based on my experience. Moral of the game: Don't dabble in the occult and Satanic abominations.
The game is placed in the Point of View of a babysitter who does not know the satanic origins of the family and the baby is the result of its family mingling in the occult, either their parents were part of a satanic cult that practised witchcraft, worshipped demons and/or worshipped other pagan deities which are normally demons in disguise. This can be observed from noticing the talisman on their chest of drawers which is used to exorcise the baby. Obviously, the parents know that their child is a demon/ possessed by a demon hence they wouldn't need an exorcism if the baby was not possessed by a demon or the baby in itself was a demon so therefore this family would have had to have mingled in the occult. Either the mother married into a man who openly practised Satanism or she herself practised satanism and made a pact with and sold her soul to an unknown demon and that demon through a man gave her a child. There are numerous theories that I have about the origins of the parents. In the theory where I mention how the mother is the one who dabbled in the occult, I am referring to the case of the devil babies.
https://thenecronomicon.fandom.com/wiki/Devil_Baby_Doll
http://www.hauntedneworleanstours.com/devilbaby/
In summary: A woman was said to have given birth to a child fathered by the Devil himself and this was the work of Marie Laveaux who practised Voodoo.
Again my moral is, Do not EVER practise witchcraft or get involved with the occult and I think this game serves as a perfect warning to those who are dabbling in the occult and plan to have children.