This is the best view expressed concerning the children of polytheists, and all the hadiths can be understood in accordance with it.
The innate disposition stands in relation to the truth as eyesight does to the sun: anyone with eyes would see the sun if no veil obstructed his vision. The false beliefs acquired through adopting Judaism, Christianity, or Zoroastrianism are like a veil that prevents the eyes from seeing the sun. Likewise, anyone with sound senses enjoys sweetness, unless some corruption affects his constitution and distorts it, making what is sweet taste bitter in his mouth.
Their being born upon the innate disposition does not mean that they actually believe in Islam at birth, for Allah brought us forth from our mothers’ wombs knowing nothing. Rather, it means that the heart is sound, receptive to the truth—which is Islam—and desirous of it, such that, if a person were left without anything altering him, he would be nothing other than a Muslim. This capacity for knowledge and action, which inherently leads to Islam unless something prevents it, is the innate disposition upon which Allah created humankind.
As for the hadith mentioned, it is authentically reported that Ibn Mas‘ūd used to say:
“The wretched person is the one whose wretchedness was determined in his mother’s womb, and the blessed person is the one who takes warning from others.”
In the two Sahīh collections, ‘Abd Allāh ibn Mas‘ūd said: The Messenger of Allah, may Allah bless him and grant him peace—who is truthful and whose truthfulness is confirmed—told us:
“The creation of each of you is brought together in his mother’s womb for forty days as a drop of fluid, then he becomes a blood clot for a similar period,