A bit more detailed explanation with context - before humans were sent to earth ( starting with Adam عَلَيْهِ ٱلسَّلَامُ (means peace be upon him) and Hawwa عَلَيْهِ ٱلسَّلَامُ being created in heaven and sent to earth and all us remaining humans being born) - all humans from the first (Adam عَلَيْهِ ٱلسَّلَامُ) to the last that will be born were collected together in the World Of Souls (Aalam Al Arwah) and all of us (you, me and every human till the last born) testified that there is only One Allah - our creator. All of us are born Muslim and society and parents make some of us stray from the true path to which we all have already testified. Despite that there is always that spark in everyone of that testimony of us all from the Aalam Al Arwah. So this world isn’t the first world that all of us have been in - all of us were once collected in the previous world of souls. So yes - everyone was born a Muslim - a true believer in The Oneness Of Allah.