I was in Entertainment from 94 - 05 and holding babies was not allowed. I used to do the baby on the lap pose often, though. As far as I recall, the lap pose wasn't against the rules, but it's been a while.
Yes, some break the rules and hold kids. There were a lot of rules that we fudged a bit like taking kids hats off, mussing hair, etc., but the holding of babies and kids was a big No-No. However, there were often times that the parents would shove the babies into your arms and let go basically forcing you to hold the kid or risk dropping them. LOL. It was not cool when that happened, but what are you gonna do?
It's like when the parents force a truly terrified child who was screaming hysterically at the characters. We would basically act just as scared of the child by backing up, covering eyes, shaking/shivering, etc. to try to get the point across to the parent that this isn't good and they are just traumatizing their kid further.
Many parents will go to extreme lengths for that "perfect" picture