The best formulation of the credo-baptist position to which I have been exposed seems to be the formulation under which physical generation's having significance for covenantal succession is seen to be equivalent to Israelite ethnic identity's having significance for covenantal succession, and as the latter sees fulfillment in Christ so does the former. Yet, while Israelite ethnic identity certainly ceases to bear decisive significance for covenantal succession as Jesus completes His work as the faithful Israelite and ascends to heaven, and pours out His Spirit and opens the covenant of grace to all peoples at Pentecost, I would ask my Baptist brothers and sisters why (biblically speaking) physical generation should not continue to bear significance across the distinct covenant epochs.
There is no explicit NT statement asserting that physical generation's significance for covenantal succession ends with Jesus' advent. And nowhere is it explicitly indicated that physical generation's significance for covenantal succession only concerns matters of Israelite ethnic identity. Therefore, this equivalence of significance has to be inferred or assumed.
I find this inference or assumption to be mistaken. The covenant promise elaborated to Abraham in Genesis 22 includes the proviso that through Abraham all the peoples of the earth will be blessed. This has the force of a qualitative (as opposed to quantitative) pronouncement certifying that all types of people will be blessed through the outworking of God's gracious covenant (not that every person on earth will partake of its blessing). OT Prophecy foretelling New Covenant times in which many distinct people groups will come to worship the one true God and NT statements concerning the proclamation of the Gospel to the many peoples or families or nations indicate that in the ancient world members of the human race were very much conceived of as diversified under national and ethnic identities and that the inclusion of all people's under the grace of the New Covenant meant the inclusion of people from the many distinct national and ethnic identities. Peoples of these diverse ethnicities and nationalities would have, like the Israelites, understood the succession of their various groups in terms of physical generation. When people of the Jews and the diverse Gentile people groups responded to the calling to be part of a heavenly race at the head of which was Christ the heavenly king, they would have naturally understood their own physical generation to also carry significance for the succession of their new transcendent ethnic identity. Thus the New Covenant entails the fulfillment of the significance of Israelite ethnic identity for covenant succession, and in fulfilling the significance of this specific ethnic identity, it could be seen to broaden the scope of the significance of physical generation for covenant succession to extend this significance to members of Gentile people groups now identified among Christ's transcendent heavenly ethnicity.