The label is real.
It is a joke on behalf of the manufacturer, the Norwegian company "Ugly Children's Clothing"
(They now seem to be trading as Marius Kids; the history/relationship was too convoluted for Google Translate to adequately explain.)
From a comment by Bent it seems:
: As for the story going from Ugly Childrens Clothing (UCC) to Marius Kids, your link states that when UCC closed in 2015 the remaining stock and the rights to the Marius pattern was bought by the founders of Marius Kids (2 women) who had previously in many years worked with childrens clothing. They were joined by one female employee from UCC. It was especially the need for good looking clothes for little boys that drives the founders, as they both have sons.
Evidence that it hasn't been faked in Photoshop comes from the various different sources of different clothes with different washing instructions, but the same joke:
Hat tip to @adam-phelps for two of those images.
Evidence that the manufacturer is Marius Kids/Ugly Children's Clothing comes from:
Ugly Children’s Clothing sent me two items for review [...] The shirt even includes washing instructions: wash inside out, remove child before washing. Funny, right?