Rear facing to me means to install the seat with the child facing the back of the chair/ couch.
I would be concerned about a young child sitting in the front being exposed to too much sun. Even with the car seat backwards the child will get sun/heat through the large windows. Our grandson took a seizure in the car and it was due to the sun on him. He was in that position for 1/2 an hour. If the car seat was further back you can at least pull the blinds.
I would also think the baby beside the driver would be a distraction. The driver may reach over to replace a pacifier and swerve. Sitting further back with an adult beside the baby might make it more safe and comfortable for everyone.
I would talk to your local police station and ask. They should have the correct answer. Laws vary.