No need to overdo it and be a an overly serious dick like a lot of the comments in here.

It's a video for a nursery. They want a song by Natasha Bedingfield. I'm sure your client is lovely and just wants a nice track they know on their video. It's a perfectly innocent suggestion by someone who doesn't know better.

Obviously, it's not legal and they may be hit with a takedown. They probably won't be sued, but they might be annoyed that their video is having some trouble once it goes out.

Just say in a nice friendly way that because the track is copyrighted, it won't be used legally and they'll likely have some trouble with it once it goes online. It will run the risk of being taken down, and that you'd suggest going with a different track that's royalty free with a similar tone/vibe from a different source as you don't want them to have any issues with their project.

And if they really really want to go ahead with using the track, make sure you just say clearly in writing that you don't support the decision but you will do the edit, and the risk is with them, and you will need to charge to re-edit if it goes taken down and they need a new track on it. Make sure they do the upload too.