First introduced in the very first level named after the game’s title, Baba is what appears to be a sheep whose text is mostly always used in conjunction with the property, “YOU”, to allow the player to interact with the world, level, whatever. If “BABA IS BABA”, then Baba cannot be changed into something else. Unless it is not applied, you can make anything Baba. Like, let’s say, “BABA IS ROCK”. This would change all on-screen Babas into Rocks. And yes, Baba’s text can take on any property a noun inherits.
Bonus: “BABA IS SLEEP”: This makes Baba go to sleep, you can see that Baba has a special animation for SLEEP.