I would like to add to this theory. Since Nicole believes she is pregnant in the early parts, and it's revealed that she is, and which is now confirmed. When Nicole gave birth to a stillborn baby girl, and when the doctor on site told the bad news that the baby died at childbirth, it shocked Nicole very hard, leading her to come unconscious. While Nicole is in recovery, John is devastated by this news and figures out ways to fix it, not only for his pride, but also because he can't see Nicole having another tantrum. This is where he sees the true parents of Chloe, maybe it's Nanci, he makes a deal with them, and eventually adopts Chloe.
When Nicole wakes up, she sees her husband carrying Chloe in his arms, thinking that's the baby girl she gave birth to. But wait, so she doesn't remember that her baby died at childbirth? Yes, I believe the shocking news that led Nicole to be unconscious may mess up her memory, and John can use this to his advantage.