This is beautiful and subtle Haiku and surely a deep personal experience of the venerable Kobasyashi Issa.
" baby in a basket " brings in all the delicate nuances of a baby in a warm basket [ a tsugura a container of woven straw ] The baby is prerhaps smiling to itself or silent and asleep or it is giggling in the outdoors.
The next line brings a surprise twist [a hineri ] so to say and beatifically closes the haiku.
"licking the edge of her[his] mouth little butterfly"
Now we can infer it is spring by the "butterfly" kigo. It is perhaps the scene outside in a temple garden with many cherryblossoms in bloom and the baby in the basket is bathed in golden sunlight.There are myriad birds chirping and there is a general delight in the space implied. There are older children playing and all people are clothed for spring in warm colours.
Issa accidentally sees a butterfly fluttering around a "tsugara" with a baby : soon he finds the butterfly licking the edge of the baby's mouth probably for some hidden sweetness there or perhaps the little butterfly found a resemblance of a flower to the tender rosy lips of the baby.
The innocence of the eternal infant and the eternally innocent butterfly fuse into a divine moment of unforgetfull cognition a mystic recognition of a Zen Moment. Time ceases to be and Issa perhaps sensed the presence of the Buddha in the baby. Further, this mystic union also surely signifies the possible future paradises to be in the seamless Pure Land Buddhist traditions.
The Haiku directly refers to the baby in the basket and immediately zooms further to the lips of the baby and the butterfly resting there. The kigo "butterfly" explodes into a seamless zoom out, metaphorically envisaging spring in its vast etymological power. There are strong hints indicating aware [eternal transitoriness ] in this yugen-rich Haiku.