That is not the case in the U.S., we had an unpleasant (and highly patronizing) conversation with an airline steward who tried to tell us that FAA regulations prohibited such a seat belt and that "the safest place for an infant is in their mom's arms".

That requirement, if it exists, is either pretty new or must vary by airline and/or by country. I've flown multiple times with small children not in their own seat, within and to/from the US, on various US-based airlines, within the past ~5 years, and that was never a requirement.