I don't think it would affect a baby or a very small child that much, actually; babies and young children are already highly intuitive. People aren't nearly as clever at hiding their emotional states as they think- something always bleeds out around the edges, and to children, those tiny, minute differences are as plain as day.

In fact, most of the 'issues' would be caused by the primary caregiver; whether or not they were internally consistent with their projected emotions. A loving mother who acting in loving ways and had loving thoughts would be received rather well- the outside matches up with the inside, and so there is very little conflict there.

However, if you had primaries who weren't consistent- a mother who acted as though she loved her child, but secretly loathed and hated it (for any number of reasons, such things happen) then things start to get interesting.

You would essentially have two frames of development within the child- the visual, the outside, and the intuitive, the inside. They would know hat the insides and outsides don't match up, and that would cause some distress. Especially with a secretly hateful caregiver- it's really hard to say which side of their reality the child would relate to more; the mechanized false routines of unfelt emotion, or the hateful world underneath. My first thoughts are that the child would adapt to survive- taking the emotions at face value and mirroring that same disconnected approach.

My second thought is that the child, needing love in it's complete absence, would come to believe that the false projection of love is indeed, actually love- and would come to associate that carefully monitored method of behavior with actual love. They would seek out autistic or Asperger's type disorders who learn to display emotions by rote. That disconnected but well-meaning intent might feel very valid to them.

There may be leanings towards Disassociative Identity Disorder, wherein it becomes normalized to to act differently on the outside than you feel on the inside. That division and compartmentalization may become more intense.

Moreover, I think the realm of intimacy would be severely impacted. Here you have a creature who is very aware, very empathetic and capable of interacting with a subliminal world who is blind to that creature. The child would feel and be able to respond, and make accommodations and adjust itself to the emotional states of others, but no-one else would be able to do the same. Other people would be hurtful, or demanding, intensely insensitive to the feelings of the child. No one would be capable of showing the same understanding or the same consideration.

This in turn would cause extreme levels of separation and observership- the child would always be looking though the window at others, but no one would ever be looking back. I think on those rare occasions where people matched their internal emotions exactly (which is rare but does happen) the child would feel very connected, and become almost obsessive about maintaining relationships with those people.

Those are the people who would feel the 'most real', and engage the empath on a number of different levels. what might be annoying to some, could become very subtle cues and differences for the empath, and they might be to navigate certain personalities that others finds brash or dark or uncomfortable.

For example, you could have an aunt, who's very depressed but always acts cheerful, and such a thing could be very disturbing. How would you relate to that? The aunt is in denial, and so acknowledging the depression might cause hostility. At the same time, every act of cheerfulness would seem shallow.

Counter to that, You have a person mentally inflicted with brash honesty. They get very angry at petty little things, and throw a tantrum. The empath might delight in that. People get very angry about tiny things all the time- they just don't show it. To meet someone who's outsides match their insides- who fully live and react in the emotional world- would be very refreshing; trustworthy, and dependable. That same type of person would be chastised by ordinary people for being too weird, or sharing to much, or being impulsive or out of control. They would be outsiders to civilization, which is wholly dependent on it's citizenry wearing their socially appropriate masks. Befriending misunderstood outsiders comes with a litany of followup problems.

As for an empaths own emotions, being connected to other people would give them a lot of exposure to the full range of human feelings. However, children can only understand what they are ready for, so a lot of not-understood emotions would feel like noise. As they came to understand the context of those emotions, they would be able to pick them out from the noise, until they developed an 'ear' or an 'eye' for many different kinds. They would probably have favourites, and be drawn to people who feel a certain way for most of the time. Conversely they would likely stay away from people constantly filled with emotions they don't like.

Like all human beings, having a sense since birth would prevent it from being confusing. We aren't confused by being able to see, or the ability to taste things. These are abilities we've always had, and we've explored and grown up using them. Empathy would be just another sense. Sometimes people are confused by what they see, and they aren't always sure what they are seeing. But nobody says 'man, I sure am seeing today. What's up with that?'

Ordinary sight is neither confusing, or seemingly complex. We look at things and we see them, that's pretty much it. Most of the time we take it for granted- it's only when we cant see, in the dark, after a bright light, that we are made aware that seeing stuff is superduper handy, and we've invented a whole bunch of stuff that makes seeing possible even when it usually isn't (i.e. lightbulbs at night) An empath would likely follow down tha same kinds of accepted, normalized sensory experiences. It's just something they can do, and sometimes they can't, and meanwhile they can see feelings. Not always good, but almost always handy. Something you'd miss if it wasn't there.