Here is a response from someone is Guest Relations to the question I had posted in the Cast Member forum:
To correct your wording, the feature is called "Rider Swap" not "Baby Swap" (Future World West attractions managers make this reminder repeatedly to the CMs).
The pass is used in any instance where anyone, for whatever reason, will not be riding (we are not allowed to question, evidently). So let's say a party of 3 comes up and one of them is 102 year old Grandpa Joe and he doesn't want to ride and the other 2 don't want to leave him alone, they can utilize the rider switch option so that they can both ride.
This is strictly for attractions which have a height requirement, though I'm sure other attractions would be willing to work with you.
And here is another response from a person who is also a Moderator in anothe Forum:
But unfortunately some CMs are nasty about it and INSIST on seeing the "child" who is not riding. We had this issue on Everest especially (more than once) where they would not give us the rider switch pass when they could not see my son (my friend had taken him over to the bridge area to watch the ride.) We had to go and get him before they would issue the switch pass to us...it's a shame that some people try to take advantage of these offers, and that some CMs feel the need to police it so strongly.
Mike, it's my understanding that it does not matter the age of the person not riding--if you ask for the rider switch pass they are supposed to give you one.