No you're not. You are subject to your own laws. Unless in your example the French decide to invade you and occupy your lands.
No doubt there are quite a few planets within Federation space such as the Malcorians (TNG: First Contact). that wanted nothing to do with the Federation. In your example if that Planet was with Federation space it's inhabitants would be Federation citizens despite them not wanting to be and subject to Federation law.
But again, that comes back to the point of the the Baku not being indiginous to the planet. Yes, the children were born there, but as a species, they didn't originate there, so it's a mute point, and as such the Prime Directive of non-interferance doesn't apply.