I think they look creepy too, I've never been that keen on dolls or babies for that matter. I suppose it depends on wether they just put them in a display case or treat them like real babies if it's the latter then it might be a bit weird.
Reborn ?!? I though you were about to tell us about some that were shoved back where they came from.
I think folk like to do different things with their leisure. If someone wishes to play with dolls then fine, that's their bag. But if it is a real child substitute, that does sound like a mental aberration to me. Likely harmless, but might be helped if the medical service is requested.
I've seen them used very effectively in therapy for elderly women with dementia - it would have been frowned upon a few years back, but is now recognised as a useful technique.