With regard to the Jewish Children who, during the German occupation, have been entrusted to Catholic institutions and families and whom Jewish institutions are reclaiming to be entrusted to them, the Holy Congregation of the Holy Office has taken a decision which can be summarized as follows:
1) Avoid, as much as possible, to answer in writing to Jewish authorities, but do it orally.
2) Each time that it will be necessary to respond, it must be said that the Church must make its inquiries to study each case separately;
3) The children who have been baptized could not be entrusted to institutions which would not be in a position to ensure their Christian education;
4) For the children who have lost their relatives, given that the Church looked after them, it would not be appropriate that they would be abandoned by the Church or entrusted to persons who have no rights over them, at least until they are in a position to dispose of themselves. This, obviously, for the children who would not have been baptized.
5) If the children were entrusted by relatives, and if the relatives reclaim them now, inasmuch as the children have not been baptized, they can be returned to them.
Logic impaired, eh?
The baptisms were not "secret," but open, for the purposes of keeping the Nazis from murdering the children as Jews.
And most importantly, what you have posted makes no reference to refusing to return the children to their parents, but only to "institutions" and "persons who have no rights over them."
Paragraph (5) specifically and explicitly contradicts you.