We recently had our 1st baby in HK, he got his Australian passport through me and HK passport through his dad(Dad is a Chinese national).now planning go back to Australia for holiday, just wondering how does the passport thing works for the babay.
We are thinking:
exit HK on HK passport
enter AUS on AUs passport
when come back,
exit Aus on aus passport
enter HK on HK passport
Has anyone done this before, will it work?

Yep, hold both Macau and NZ Citizenship. I exit on a NZ passport and enter on Macau Resident I.D card. And same process when I leave...

Yes, exactly. I have a HK ID card which I use to enter HK (using their automated fingerprint reader machines) and enter China on my British passport and the reverse when I go back.