"bébé" is a noun ("bébé(s)") and not an adjective. "animal" is a noun ("anima[l/ux]") and an adjective ("anima[l(e(s))/ux]"). French rarely combines two nouns, which is common in English where one of them is used as an adjective, e.g. "car alarm". An example in French is "porte-monnaie". Note it is hyphenated whereas "bébés animaux" is not.
My conclusion based on all this is that "animaux" is being used as an adjective, so "les bébés animaux" would literally mean "the animal babies". However, you'd have to ask a native French speaker if that's how they think about it.
This seems to be one of the cases where two nouns are allowed in apposition in French. Larousse specifically allows the noun bébé in apposition to another noun when referring to a baby animal. Maybe that is why Duo has included this exercise.