What is it and why is it used? Rhodium is a very expensive silvery white metal many times more expensive than silver, twice the price of platinum and three to four times the cost of gold. So why is it used? Plating over white gold or sterling silver will increase the reflectivity of white gold or sterling silver and it makes diamonds and cz stones more brilliant. Because rhodium is a "noble metal" and inert, it withstands corrosion and makes jewelry more durable as well.
Can rhodium plating wear off? Yes, eventually, over the years, after a lot of wear, rhodium will wear off. But it will have ensured protection of the base metal, whether that's gold or silver, in the meantime. With baby jewellery, which is worn for a relatively short time, compared to adult jewellery which might be worn on and off for decades, it's a real asset, ensuring knocks and scratches don't damage the surface of the baby bracelet or children's necklace, that it coats. Often, baby bangles are coated with Rhodium so that the shine will remain whereas without the plating, over the years, knocks and scratches will slightly dull the shine.
Other platings are regularly used in today's children's jewellery. Platinum for example has a similar use and a newer coating, made especially for jewellery, called E-shine, was developed for the same purpose.