The dog would not be staying in my home with the situation you are describing. The dog is telling you she is not comfortable with the baby walking, loving on her, and acting like a 1 year old child. Your child is going to grow up more every day and push limits with the dog.
Since there is growling already, why are you waiting until something back happens, which undoubtably will in the future. The dog is not happy with a moving squeeling wobbly human , listen to her and be sensible. your husband is thinking about your child and a possibly horrific injury/mauling . Rehome now before the inevitable happens and let the dog have a home without kids.
Think about your baby, not the dog.