How do pediatricians treat their own kids with erythema toxicum?

Generally Nothing. This is a benign newborn rash that will go away. No therapy is necessary.
Do nothing. Erythema toxicum is benign, asymptomatic self-limited rash, does not need treatment and I am not aware of any effective treatment. Normal skin care for newborn, avoidance of chemicals and fragrances will suffice.
Same as others. Erythema toxicum is a non- worrisome rash that initially presents in newborns between 3 d to 2 w of age and is usually gone within 2 w and is completely gone by 4 mo. It presents in 50% of newborns. No tx is needed. Cause is unknown but if the red papules are scraped and the contents are examined under a microscope, it contains eosinophils which are wbcs that fight parasites, thus is good.
We don't. Erythema toxicum is not a disease, it is normal for infant skin, and they all grow out of it.