The Queen has more jewels than she could possibly ever wear in her lifetime. I suspect she has gifted more than one of her grand and great grands with a nice piece from her stash.
I doubt she is giving it to the kid to wear now, but, as a sentimental gift directly from her, for the child to cherish as he/she grows. Remember, the Queen is going to be 93 years old tomorrow. The odds this child is going to remember her very well or at all are very remote. She isn't going to be there for this child's graduation or marriage or other occasion when a piece of fine jewelry would make more sense.
William and Harry received all of their mother's jewelry, it seems, and they have seemingly kept it over the years to give to their wives for special occasions. Handing down jewelry to the kids, boys or girls, is seemingly a family tradition.
Also, remember a lot of the stuff in these news stories is plain ole' BS.