However, the High Court judge did order her to complete 400 hours' community work and pay $2000 to the baby's parents, which was donated to fertility research.
Yesterday, the Solicitor-General appealed Taulapapa's sentence at a Court of Appeal hearing, seeking a conviction for the teen.
Acting as counsel for Taulapapa at yesterday's hearing, Nicholas Chisnall said Justice Woodhouse made the correct, if "exceptionally difficult", decision.
After the hearing, the baby's parents, who have permanent name suppression, told the Herald they believed Taulapapa "knew full well what she was doing".
"A year ago on the 9th of August our world was turned into a living nightmare after Sydnee crept up our back steps, broke into our home wearing a balaclava and kidnapped our newborn baby.
"She had our 11-day-old baby for over seven hours, during which at any time she could have ended our nightmare by returning her to us."
The parents and about 80 police launched a major search to find the newborn.
Taulapapa was found in the early afternoon in Manukau-Togiavalu's Suzuki Swift in the suburb of Favona. Sitting next to her was the baby.
Taulapapa provided a reference for Manukau-Togiavalu's application to an agency to become a nanny.
Manukau-Togiavalu also used Taulapapa's email and said she had experience caring for babies and had cared for Taulapapa's fictitious children.
"[Taulapapa] also provided baby clothes, baby gear and drove the car around Auckland so as to avoid capture," the parents said.
"She clearly knew what she was doing was wrong, otherwise why do it at night and while wearing a disguise?"
The parents said the kidnapping of their daughter has caused "lasting and considerable damage".
The father had stormed out of the courtroom when Justice Woodhouse discharged Taulapapa without conviction.
"Sydnee pleaded guilty and is recorded on video, so how can she be discharged as if she is not guilty? And what message does that send to her and other potential kidnappers?"
A discharge without conviction is a sentencing option available to a Judge only if a defendant has pleaded guilty to their charges.
Manukau-Togiavalu had told Taulapapa she gave birth but her baby was adopted out and now she wanted it back.
It was just the third night Manukau-Togiavalu was working as the family's nanny but she had planned the kidnapping for weeks if not months - hosting a fake baby shower and wearing a pregnancy suit to fool her family and friends into believing she was pregnant.
Chisnall said yesterday Justice Woodhouse recognised Taulapapa was manipulated by her cousin and acted out of loyalty, despair and fear.