Perhaps I can shed some light on this for you.
Object is a term in programming, especially in video game programming, that most likely comes from Object-Oriented Programming (OOP). OOP became popular largely on the idea that it would make programming more like the real world and easier to understand and operate on for that reason, especially with large codebases. Though it has been successfully utilized in that way to some degree, there is disagreement in the programming community as to how useful an object-oriented focus is, largely because programming is not, in fact, like the real world (or when it is, it's not always like it in the right ways). For example, I could walk up to your internal organs and say hello to them, but they probably have no way of knowing that I attempted to communicate with them.
Similarly, object-oriented programming gets some flack for sectioning things off too much, to the point that it becomes a nightmare when you want X to communicate with Y and it needs to jump through an elaborate series of hoops, some of which simply may not exist and need to be created, for it to be able to do so, when it probably could have done the communication a lot more easily had things not been so sectioned off.
In video games, in particular, object-oriented programming is often used literally for objects, where each instance of a simulated object in the game is represented by a copy of a general template, usually called a class, or class object. Ultimately, classes, or objects, are just a way of grouping together information and, in some cases, sectioning it off, with the goal of making it easier to organize and making it less likely that something terrible will happen because of a bug, or, sometimes more importantly, a coder who doesn't understand the codebase well enough and tries to do something funky with it.
It's just a name, ultimately. In the C++ language, there's something called a "struct" that is almost identical to a class and could be used for "objects" in the same kind of way. Another name that is used in some game systems is "entities."
So yes, babies are "objects." Other sims are too. Probably the most important difference to players between a sim baby and, for example, a sim toddler is the baby's inability to move around. Lack of visible needs and inability to take control of the baby in any way are other major factors, I'm sure. These are traits that are unique to the "what makes a sim a sim" experience and because they are missing, babies can tend to seem lifeless and mechanical.
