Also, lets say that they do have the baby. Sure the baby may not have any noticeable birth defects however chances are that it's genetics are fucked up and if they have kids they could pass their "bad" genetic code to their kids.
Alright, here's the thing about incest and genetics: The probability of genetic defects and abnormalities does go up, but only after many generations of close inbreeding. And so, it's is tremendously bad,
from a genetic standpoint.
The reason why is not because they are related, but because their genetics are similar.* The whole purpose of genes is to make variations of a type of species so they may adapt better to their current environment, a slightly different one, or a completely new one, so the more differed the genetics of the parents, the more likely the offspring will have varied genes, increasing its chance of having an advantageous gene and negating the effect of bad genes, thus increasing the probability of surviving and passing on its own genetic code**. Also this variation helps offset the effect of genetic mutations, which can be good, but the majority are bad for the species.
Now, if two genetically similar people produce an offspring(i.e. family members), because they are genetically similar the mutations in their genes will most likely be extremely similar and thus amplified. After several generations of amplification and inbreeding, the offspring will become more and more similar and the negative mutations in their genetic code will occur unchecked, because their is no dominant mutation in the genetic code of the parents to cancel them out. This is also true for positive mutations, but they are far less likely and any that do occur will not be able to make up for all the negative ones that are already present.
So, in summary: After generations of inbreeding/incest bad mutations build up and the offspring are not as good genetically when compared to offspring from families without incest.
*I know the two go hand in hand but in theory if you took two genetically similar people, like they were brother and sister (but
not brother and sister), that were not closely related and breed their offspring with others who were similar to them, like siblings, (but
not siblings) at continued this patter you would get the same effect as if they were family, even thought they weren't.
**This is the goal of all life: Survive and reproduce.
On another thing mentioned in this thread,
this explains nature's "defense," if you will, against incest.
As for my opinion: It's weird and creepy, but I can understand why it might happen. If they choose to have a child, that's their choice, not mine.