NW did nothing wrong!
Thats what the rules are they can not give a free seat or ticket to anybody that can not afford it.
If the child is over 2 FAA demands a seat for it so pay or stay! No bending the rules here if anything happens because the child did not have its seat I can see the claims against NW! They would be in trouble! I bet the parents knew about it and took their chance too!
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Viele Grüße
Oliver