Hmm, I'd never tell someone that their baby is ugly. If I know the gender, I might say "It looks just like it's father/mother" instead of "Oh my fucking gosh, did that ugly creature crawl out of you/your wife?! Poor you."
It's not about caring or not. When someone asks you something are you going to lie or tell the truth.
This is ridiculous. We all know there is honesty and then an honest opinion. An honest opinion doesn't always need to be said. The majority if us know when to keep those opinions to ourselves. This situation, should it ever arise, is on of them and you know it.