At the time of dressing the baby, one wouldn't consider it abusive. This is because no one thinks the child will remember it, and because this was done quite a bit back in the early part of the 20th century.
However, parents should not continue the practice, as it could trigger one's innate transness.
That is, being trans is innate, to some variable degree. If one does have this characteristic, CDing at any age could awaken it. If one does not have this characteristic, CDing at any age would normally not affect the child.
The problem comes with not knowing who has this characteristic, and no idea at what age it could be awakened. If left alone, and never cross dressed, it might never awaken.