I use a simple oil, sometimes wax - or simply leave it raw.
The oil is a paraffin oil which is also allowed into contact with food. So it's a safe one even to use on toys.
The wax is a liquid beeswax - also allowed for toys.
Even so, I often leave toys raw.
I do not lacquer the wood, because I do not want to seal it. There is nothing wrong with wood, It is a natural product. One may feel it and may feel the little bit of structure which is left after finish.
regards
Torsten