Hey M.- I have a 3rd grade girl who spends about 20 minutes each morning at our house before walking to school with my 1st grade daughter. This girl uses baby talk and it irritates me when I hear it - but I don't answer to it, and my husband and I have explained to her how she should speak in certain situations. (i.e. she uses baby talk to ask for cereal, we ask her to ask properly, and when she does then we happily give it to her and resume a normal morning.) Our daughter was beginning to pick up on it, so we wanted to nip it in the bud. We remind her that she is her own person, and she doesn't need to act like her friends to be a cool person.
I think it's a phase, and if you just make her converse with you as usual, then you're teaching her properly. If she uses it in play, then it's up to you, but I'd let it slide.
js