This is further clarified by the Prophet’s words in another hadith:

“Every child is born upon the natural disposition until his tongue can speak for him; then he is either grateful or ungrateful.”

He thus describes the child as remaining upon the natural disposition until he acquires understanding and discernment, at which point one of these two states becomes established for him. If he were inwardly a disbeliever by virtue of his parents’ disbelief, this would have been the case from birth, before his tongue could speak for him.

Likewise, in the other authentic hadith, narrated by ʿIyād ibn Himār, the Prophet, peace and blessings be upon him, relates from his Lord:

“I created My servants as upright monotheists, but the devils led them astray. They forbade them what I had made lawful for them and commanded them to associate with Me that for which I had sent down no authority.”

This explicitly states that they were created upon the upright, monotheistic religion, and that the devils led them astray, forbade them lawful things, and commanded them to associate partners with Allah. If a child actually became a disbeliever from birth because he followed his parents’ religion, before anyone taught him disbelief or instilled it in him, then it would not have been the devils who turned them away from the upright, monotheistic religion and commanded them to associate partners with Allah. Rather, they would have been polytheists from birth, following their parents’ status.

The confusion in this matter arises from conflating the rulings governing disbelief in this world with those governing it in the Hereafter. Since the children of disbelievers are subject to the rulings governing disbelievers in worldly matters—such as their fathers’ guardianship and custody over them, their fathers being allowed to teach and discipline them, mutual inheritance between them and their fathers, their enslavement if their fathers were at war with the Muslims, and other such matters—some have come to suppose that they are disbelievers in reality, like someone who professes disbelief and acts upon it.