I didn't want to call this 'failed' projects because they were all amazing, but they were either changed or canceled. I used to watch Muppet Babies religiously through the 80's and 90's but I don't remember Muppets, Babies & Monsters. The first season of Muppet Babies did very well in the ratings, so CBS decided to expand the series from half an hour to a full hour in 1985, pairing Muppet Babies with Little Muppet Monsters. The umbrella title for the hour-long package was Muppets, Babies and Monsters. What I do remember is The Muppets: A Celebration of 30 Years, which the show Little Muppet Monsters was mentioned.
The show was anchored by three young Muppet monster siblings: Tug, Boo, and Molly. They lived in an apartment belonging to the adult Muppet Show characters and called them 'uncle.' Cameos would be supplied by Scooter, Kermit the Frog and various penguins and rats. Recurring animated segments included "Pigs in Space," "Kermit the Frog, Private Eye," and "Muppet Sports Shorts" (featuring Animal). Muppet segments included "Fozzie's Comedy Corner," with Fozzie discussing issues related to old jokes, illustrated through animation, and Gonzo presenting a cavalcade of weirdness, using silent film footage. Each episode also featured an original Muppet song. Only 2 of 18 episodes aired.
According to Muppet Wiki, Storyboard director Scott Shaw discussed the show in MuppetZine issue #3 (Winter 1993): "The concept of this second half-hour was neither simple nor particularly well-developed. A trio of new (live-action) Muppet Monster Kids, working from the basement of the adult Muppets' home, create their own television station which broadcasts only to the TV sets in the house upstairs. Although eighteen episodes were produced, only two of them ever aired; Henson Associates and CBS agreed that the concept had never been properly thought out and just wasn't up to Henson's high standards. To Jim's credit, it was his idea to pull the show from the Saturday morning lineup.
I've always felt that the juxtapositioning of live-action and animated Muppets invited an unfavorable comparison, to which the cartoon version inevitably suffered; the puppetry was just too good. The combination of Muppet babies, adults and kid monsters was very disorienting. Also, due to a lack of development time, the concept -- and therefore, the writing and designs -- never quite jelled. The now-vacant second half-hour was filled with repeats of the first season's Muppet Babies episodes, and the ratings stayed strong."
I admit it is indeed confusing. One episode is available on the internet now, and to see the Muppets we known from the muppet show to be in muppet form, adults and babies in cartoons is disorientating. Also, the adult muppets look creepy animated, I guess because we are used to see them without feet. The three monster kids were also seen briefly in the special The Muppets: A Celebration of 30 Years, which was broadcast in January, 1986. The special was shot before the decision was made to take Monsters off the air, so the show cheerfully plugged the Muppets' latest production -- even though that production had been canceled four months earlier. So I was confused to see it as I never seen or heard of them before.