Butt Naked?

Another Funny Lilly Story-
Lilly is fond of her baby dolls- playing house and all sorts of things. Lately she chuckles while telling Rob and me, "This baby is butt naked." She really means buck naked, right? Despite many attempts to correct her, she insists her baby doll is "butt naked." I'm guessing a friend at Tiny Toes (Megan) taught her this phrase. It perplexes me and yet, at the same time, is very funny to hear her say. Rob agrees.
So, in search of the correct lingo, and for peace of mind, I did a little Google search on the term/terms. It's rather interesting what I found... perhaps Lilly is correct after all...
After googling "origin of buck naked," here's what I found:

Basically, there are 2 theories to the origin of "Buck Naked."
Theory One: One theory backed by the American Heritage Dictionary proposes the original phrase was actually "butt naked." The phrase was then cleaned up to "buck naked" so it could be used in polite company.

Theory Two: British wordsmith Michael Quinon has another theory. He's of the notion that "buck" and "buff," another term to describe nudity, are both derived from buckskin and buffalo hides. He argues that buff leather is tan in color, much like the color of the Europeans' skin after being in the sun. This led to the expression "to be in the buff," or naked. Thomas Dekker was the first to go on record with the term when he said in 1602, "I go in stag, in buff." The assumption is that "buck naked" has a similar derivation from buckskin.

Which theory is correct? We'll never know, so I guess we don't need to correct Lilly for referring to her baby as "butt naked." She could be technically correct according to theory #1, yet not too polite, to say the least. :)