Here we go:
1. Is a validly baptized baby baptized into the Catholic Church or are they merely baptized as a Christian (whatever that means)? Is it better to say that they are baptized into Christ, but not necessarily the Church (although I do not see how that is possible)
All people who are baptized are placed in communion with Christ and his Church. This communion will be complete is nothing obstructs it. If something does obstruct it then the communion will be real but incomplete.
If someone baptizes a person intending that person to be Catholic then there is nothing obstructing on these grounds and the person's communion with the Church is full, the person counts juridically as a Catholic and is subject to canon law.
If someone baptizes a person intending that the person will not be Catholic then there is something obstructing the person's communion with the Church and so it is partial and the person is not juridically a Catholic and is not bound by canon law.
If someone baptizes a person and is unclear about whether the person is to be Catholic or not then the situation is legally unclear and we'd need further guidance from the Church on how to handle such cases juridically.
2. If they are baptized Catholic, is the relationship merely material or formal? If the relationship is merely material (whatever that means in this case, borrowing from a poster, above), when do they become a formal Catholic? At no time, unlike those entering the Church from a Protestant denomination, are cradle Catholics required to take an oath of allegiance.
The Church does not use the categories "formal" and "material" in this context, so far as I know, and I'm not sure what they would mean here.
A person becomes a Catholic by baptism at the moment they are baptized with the intention that they be Catholic. No further act is needed to make them Catholic, though their communion with the Church will grow through the other sacraments of initiation and their assimilation of the teachings of the faith.
If the relationship is formal, then since no formal defection is now possible, such baptized babies, if raised as a Protestant or worse, are really being spiritually abused since their natural heritage is being damaged.
I don't know that the Church would use the language of abuse, but there is a contradiction between what the child objectively, ontologically, and juridically is and the way it is being raised.
3. Since formal defection is not possible, once a Catholic, always a Catholic, so the old argument that Canon Law does not bind people outside of the Church is harder to apply to those cases where the baptism is in the Catholic Church and the person leaves for a Protestant denomination.
Correct, although it was only in the three marriage canons that there ever was an exception for formal defection. All other laws were still binding on a person who had been baptized or received into the Church. There was no automatic dispensation, e.g., from needing to observe holy days of obligation or days of fast and abstinence. Now it's (going to be) consistent across the board, marriage laws included.
They are no longer to be considered outside of the Church, since there is no process by which this may happen, except by excommunication.
Correct, except that excommunication does not place one outside the Church. Despite its name, excommunication's effects do not include making one not-a-Catholic (cf. CIC, can. 1331).
As such, unless there are exceptions provided for in the Canons (the in extremis exceptions of Can. 1116 have already been mentioned), such people must seek to be married in front of a priest or else their marriage will be invalid.
Yes.
4. I thought, however, that the marriage of any two baptized people was sacramental.
Yes. Any valid marriage between two baptized people is sacramental.
By law, the marriage can be blocked (rendered invalid) by a defect in form.
Yes.
However, simply exchanging vows without a priest (two witnesses are required), in extremis, must be the minimal form necessary for a valid marriage.
Under current canon law, yes. Before Trent, that wasn't the case. Witnesses were not needed for validity. Nor was a priest. This caused lots of problems, which is why form was established in the first place.
This implies that there must be something in addition to the minimum form required for a normal form Catholic marriage, just as in the case of baptism, where, ordinarily, it is to be done in a Church by a priest.
"Minimum form" is not the right way to phrase it, but essentially, yes. The conditions that are required for form are spelled out in canons 1108-1116.
5. Since baptism performed in a Protestant assembly, where considered valid by the Church, is not administered by a priest but a laymen, these baptism are considered not normal, but of an emergency variety.
I don't know that this is the best way to put it. Such baptism are valid. Applying additional categories like ordinary/extraordinary/normal/emergency/etc. may not add much, conceptually, outside of a Catholic context.
Are weddings performed in a Protestant assembly also to be considered of an emergency or in extremis variety?
Ditto. They're valid. And there is even less basis for calling them extraordinary or emergency or anything like that since if you are not bound by canon law there is no requirement whatsoever to observe the Catholic form of marriage.
6. In any case, do Catholics incur any responsibility to inform other Christians of the requirements of the Church, since they cannot defect from it (probably not, under the usual rules for fraternal correction, I assume).
If someone has never been baptized into the Catholic Church or received into it then the person is not bound by canon law (CIC, can. 11) and there is no need for Catholic to inform them of the requirements of canon law because they don't apply to them . . . . unless the non-Catholic is doing something like trying to marry a Catholic outside the Church without a dispensation from form, in which case a Catholic is involved and the Catholic party is subject to canon law.
7. How can there be a dispensation from cult if a Protestant cannot defect from the Church?
Protestants do not need a dispensation for disparity of cult (e.g., to marry a Jew or a Muslim or whatever) because they are not subject to canon law and thus the impediment arising from disparity of cult does not apply to them.
These questions were all easier to answer when I thought the statement, "Those outside of the Church are not bound by her laws." Now, I am not sure who is outside and who is inside the Church. This is the fundamental question on which all of the other questions are based.
Divine and natural law binds everyone. Divine positive law (e.g., don't get baptized again if you've already been baptized) applies to all the baptized. Latin rite merely ecclesiastical law binds those who are members of the Latin rite of the Catholic Church, per canon 11:
Merely ecclesiastical laws bind those who have been baptized in the Catholic Church or received into it, possess the efficient use of reason, and, unless the law expressly provides otherwise, have completed seven years of age.
Hope this helps!

