I'm not sure but I think inmates can have special "conjugal visits" where sex with a visitor is allowed. I assume that when a female inmate has a baby, she keeps it with her until the child reaches a certain age like 3 years old or something, maybe with special accommodations. This is based on a video I saw about Mexican prisons but I assume it could be the same in the US.
I double checked and it's also the case in several US states. Sex during conjugal visits and prison nurseries. The rules vary, sometimes the mother must be pregnant when entering custody to be eligible, but not always. The duration of the child stay in the prison varies as well, between a month to 30 months.
