Not every catholic is equally 'devout', and yet they are still catholics unless they've been excommunicated. Not every practising catholic is equally devout/practises to the same standard, either.
Some schools only require you (the parent, or perhaps the child) to 'be catholic' in order to get admission priority; some require you/the child to be a 'practising catholic' (which can mean anything from attending church pretty much weekly at the least, to attending church occasionally e.g. at Christmas and Easter - you're still practising, just not as much as you 'ought' to; every school sets different requirements as to what counts as 'practising') and some differentiate between more and less 'devout', more or less practising catholics e.g. by giving those that attend church more often preference over those that attend church less often. But not all catholic schools do this. For many, there is simply a criteria/threshold that needs to be fulfilled to count as (practising) catholic, but once you've met that criteria, there is no further differentiation between more/less devout, more/less deserving of a school place.
I think it is a bit off to suggest that you are either a 'devout' catholic and hence would not for any reason in the world delay baptism, or you are not a catholic at all.
If the school does not give preference to 'more devout' catholics over 'less devout' ones (only prioritises catholics over non-catholics), then it is wrong to suggest that as the OP is not very devout, they should allow the place to go to a more devout family.
The fact that OP only recently studied the admissions criteria for their desired school suggests to me that it is unlikely that they have been attending mass only for the purpose of getting a school place. Rather it suggests to me that they truly think of themselves as a catholic family (perhaps not as 'devout' as some, but still catholic), they attend mass regularly, and hence it has never crossed their mind that they may not get admitted to a school that professes to give priority to catholic children. They are not clued up about how the admissions system works and hence didn't think to study the oversubscription criteria, to then conform to the requirements there.
(Or they may have thought to play the system but for some reason (arrogance?) neglected to find out how the system works in the first place.)