Keep in mind that these are yarns on the lower end of the quality scale - you can machine wash and dry them, which a lot of parents appreciate, but you are right about the shedding. Write to the companies and ask them why they have baby-unfriendly yarns, I say. Not all of their yarns shed, and some of them are good for making baby items but aren't labeled as being for babies - all you need is a yarn that's not itchy, that breathes well (natural fibers or natural fiber blend), easy to care for, and appropriate for the item you plan to make.
Dale of Norway Baby Ull is a fingering weight machine washable merino wool, soft enough for a (non-allergic) baby and it wears like steel. Berroco Lullaby
is soft nylon ribbon that can be used for baby clothing and blankets. I've used Pakucho organic cotton for baby hats and washcloths, and I'd like to make a baby blanket with it someday. Your LYS should be able to make good recommendations based on experience