What does Billy extrapolate happening after the end of the war movie he is watching on the night before his daughter's wedding? What does the reverse of all human beings returning to Adam and Eve tell us?

Billy extrapolates that everyone turned into babies.... all of humanity. The reverse would bring the world back to perfection in the persons of Adam and Eve.

The American fliers turned in their uniforms, became high school kids. And Hitler turned into a baby, Billy Pilgrim supposed. That wasn't in the movie. Billy was extrapolating. Everybody turned into a baby, and all humanity, without exception, conspired biologically to produce two perfect people named Adam and Eve, he supposed.