The original (and intended) meaning of the signs was actually subtly different. The idea being that in the event of a crash, if the bodywork of the car was mangled, then a very small child may become lost in (or thrown from) the wreckage, and if all involved were incapacitated, that child would not be looked for and not found.
A handy piece of plastic on a rear window would be much less likely to get hidden in that way, and thus be a warning to any emergency service personnel.
Unfortunately, this has been hijacked by idiots, with any number of variant "*ludicrous animate or inanimate object* on board" signs, and its value is of course lost.
Handily, the amount of associated detritus that seems to fill the cars of anybody also carrying a baby manages to fill this void, and the point becomes somewhat moot.
Those '*moron* on board' signs are an odd personal bug-bear of mine, and I really don't know why I find them so annoying.
EDIT: Thanks Henry, beating me as I ranted.