The most common cause for the deformed infants and toddlers are third party custom clothes that you may have inadvertently downloaded from the exchange at the official site by downloading sims or households from there which get packaged with those clothes. Some people create sims that have CC clothes which are not properly classified to be for adult/young adult or elder only, so your infant sims or toddler may end up randomly trying to wear the clothing item which only fits grown sims, and hence you get the distorted bodies. Some of the sims uploaded will even have custom naked sections, so do not be surprised if you find a sim townie walking al fresco.
The Sims 3 official forums, under their technical section, has a topic on how to remove bad custom content. I would link it now, but unfortunately the official forums seem to be down for maintenance at the moment. I will try to link it later. But you should search over there when you get the chance.
I stopped downloading sims from the exchange after getting a few surprises and a lot of hair, custom eyes, makeup, skin tones, etc. that I did not like. Better to make your own in CAS.