1: The images and videos shown are only a snapshot of the event
2: Parents make their own judgement whether they think their baby is somehow going to be scarred by seeing a cabaret show.
Its not FOR babies. They have different types of events that are tailored depending on age range. Events for older children will have different performers, different costumes.
Whether you consider drag or cabaret as sexualised is your own call.
Are you claiming that women taking their clothes off as burlesque dancers - down to nipple pasties and pants or non taking their clothes off to their pants is not sexual?
What about writhing on the floor with legs wide apart while wearing a thong that just about contains the penis and stripper heels? Is that sexual?
Or being upside down in a chair with legs wide apart in a revealing costume?
What about getting done up in a BDSM harness and swinging from ropes hung from the ceiling while almost naked?
Several of the semi naked, stripper heeled drag performers were specifically interacting with the babies.
The topless (nipple pasties) burlesque dancer was pictured holding a toddler - it might have been her own, it might not - the kids in the audience would not have known that.