2. Everyone in the New Covenant knows the Lord

Do you know who is trully elect? This is actually a strawman. Paedobaptists agree that all the elect are in the covenant. We also believe there are others in the visible church, which is how the sign is administered. Your requirement, belief, is indefensible. It is profession, which may not necessarily mean belief. So #2 is not a possible argument, unless you want to claim infallibility in knowing the elect. The LBC agrees with me...

The London Confession of Baptist Faith, Chapter XXIX
Of Baptism
II. Those who do actually profess repentance towards God, faith in, and obedience to, our Lord Jesus Christ, are the only proper subjects of this ordinance.

We cannot know mens hearts. So we do not baptise on belief, but on profession. Profession doesn't necessitate salvation. So equating all those baptised with the elect is a false assumption.

God bless,