It's a reference to a meme popular amongst Reddit users and other online forum users.
How Is Babby Formed refers to a popular question posed to the Yahoo! Answers forum about how humans reproduce. The question is known for its awkward phrasing and misspelling of the word "baby." The phrase became a popular source of YouTube remixes, as well as its frequent use as a copypasta.
In 2006, Yahoo! Answers user kavya posted the question "how is babby formed? How girl get pragnent?" The most famous answer is also infamous for misspelling and grammatical errors. It reads:
"They need to do way instain mother> who kill thier babbys, becuse these babby cant fright back? It was on the news this mroing a mother in ar who had kill her three kids, they are taking the three babby back to new york too lady to rest. my pary are with the father who lost his chrilden ; i am truley sorry for your lots"
On November 26th, 2006, Something Awful user Johnny "Doc Evil" Titanium posted a series of screenshots from Yahoo! Answers in a round up called "Yahoo! Answers Revisted." Included in this entry was kavya's post.
Several months later, on February 5th, 2007, Something Awful user Dave "Shmorky" Kelly included the post, as dramatized by a SA forum member, in his "Flash Tub" animation, along with other favorite Weekend Web posts. "kavya" was rendered as a gruff-voiced caveman.
On March 7th, 2008, Urban Dictionary user mobrien118 posted a definition of the word "babby." Within nine years, the post ... has received more than 1,000 upvotes.
Usually the preferred spelling is "babby's" and not "babbies".