Katie Roiphe unpacks the term:
Since our bigotries are less openly and exuberantly expressed than they were in past decades, they take refuge in subtle, shifting word choices. Love child is definitely more friendly or tactful than the more Shakespearean bastard but it nonetheless cloaks a certain discomfort with the facts. Love child is both tolerant (that is, more tolerant than other terms) and mocking; it contains within it our contradictions; it passes judgment in an ironic way—indirectly, playfully, but also plainly.
In my view, this euphemism is so non-judgmental it's judgmental.