According to a study published in the journal Sleep Medicine Reviews, dim lighting can help reduce stress and prepare the body for sleep. Night lights with low light intensity (like LEDs) do not disrupt the production of melatonin, the hormone regulating sleep, unlike brighter lights which can interfere with this natural process.
Reducing nighttime anxiety in children: A key

A night light provides a source of soft light that helps reduce the fear of the dark, common among young children. According to the American Academy of Pediatrics, studies show that children who sleep with soft light have fewer signs of separation anxiety from their parents, which helps them feel safe and secure during the night.

Babies often wake up at night to be fed or changed. A night light with soft light allows parents to intervene without turning on a strong light. Soft light does not disrupt the production of melatonin (the sleep hormone) as much as bright light, which promotes a quick return to sleep.