Shot in the dark but as a teen I had untreated athletes foot that scabbed like this because I unconsciously scratched and rubbed it, but I can’t see well enough to see other symptoms of this like the scaly, flaky skin. The other thing that comes to mind is examples I’ve seen of herpes in small children. NAD, but I remember that in babies it can show very severely and if you compare some examples online (terrible idea please go to another doctor)it does look similar. It wouldn’t have even needed to be passed on by you, it could be a friend or relative kissing the baby etc. This is a very serious infection for infants and children under two and absolutely requires treatment because of much more severe symptoms, including some leading to death. I’m sorry you and the babe are going through this and I hope beyond hope it is simply a rash that became cosmetically unsightly. Either way it is absolutely enough to raise an alarm about and I’d find another doctor or better yet head to the ER/urgent care and do whatever it takes to get a specialist to look at it.