Being close contact with diapers, how this chemical might be effecting babies ?
The chemical is basically a harmless salt not too different from sodium chloride (Unless you were to start eating quantities of it), and there is not a large amount of it in a diaper, so obviously the chemical is specifically used for its beneficial affects.
Use of the chemical improves sanitary conditions and comfort for babies wearing diapers, since it reduces undesirable moisture and wetness in contact with their skin: this is a health and quality-of-life improvement and helps defend against promoting possible rashes or fungal infections of the skin by keeping the skin dryer.
In reality, the baby will be more comfortable, so they will likely be requiring a change less often, which will spare plastic from the landfills.
I think the only real alternatives would be to either use no diapers at all... monitor babies closely and make sure the diaper is changed immediately if they wet themselves in the slightest, or use porous cloth diapers.