Since they never showed it to us, I'd speculate that the baby was in the midst of the explosion. Homelander 'had time' to extract Butcher, just to show him, he's always one step ahead of him. However, my theory is, the baby received Compound V, because 'mommy' wanted a Supe for herself. Probably survived it, it would be quite brutal if he didn't.

During the second season they mention that the baby was "mysteriously" found several miles from the explosion. So Homelander saved both the baby and Billy Butcher.

Baby was made a Compound V junkie. Mommy is a Supe freak and needs her own. Homelander is too big a doosh to care. No cameras, no rescue.