Is getting a herpes outbreak during labor life threatening for the baby?

Yes, it can be. Because herpes simplex infections in newborns and very young babies can be life-threatening, mothers with genital herpes outbreaks in labor can be safely delivered by c-section. Herpes in a newborn can spread all through the baby's body, including the brain. In the brain, the virus causes encephalitis, with seizures, lethargy, brain damage, and even death.
Genital herpes. Genital herpes can carry a high mortality if it was active during the labor. Many OB elects to do c/s to avoid the baby catching herpes.