There is some evidence that the Clans do engage in genetic engineering when needed to eliminate problems like inbreeding. Kindraa Payne (Fire Mandrill) was having this problem because their own gene pool to work with was so small and FM: CC said the scientists were working on some new genetic recombination techniques to reverse the effects.
But there is also a sidebar in Warriors of Kerensky that talks about how the scientists prefer to let things develop as naturally as possible. When I say develop I largely am talking about the successful warriors earning bloodnames and having their genetic legacies added to the breeding program. The idea was to funnel things down by only using the successful to create the next generation. They wanted that process to be semi-natural. They try not to interfere with DNA and engage in genetic engineering more than they need to. Those "need" moments include things like eliminating disease as well as developing the trueborn phenotypes.
Clan Diamond Shark's section in FM: WC notes that the Clan was a bit more willing to experiment with certain genetic lines. Knowing that a lot of those experiments would fail but that some would yield great outcomes. They credited solving a lot of the problems with high failure rates in elemental sibkos to tendency of theirs to experiment and prided themselves on their own successful elemental lines.
Basically the Clan approach to genetic engineering is often surprisingly conservative. They also don't seem to be particularly great at actually predicting what a change will manifest in a human being until they see the end result in the flesh. So their ability to somehow model what the end-result of a genetic engineering action will be, without birthing a human, seems to be rather limited.
So when we get experimental sibkos, or in particular the society doing weird stuff. You hear a lot more about defects, defective individuals walking around as part of their little army or being found in a society lab. That's someone throwing off the conservative approach and attempting some hardcore genetic engineering. But it's basically scientific experimentation with human beings. Stripped of a lot the typical ethics.
Keep in mind. Clan Trueborns like to pride themselves on being the epitome of humanity. The best that humans can be, essentially, through the eugenics program. A little failure is considered ok. A lot of extreme experimentation that leads to a lot of obvious failure, such as whole sibkos of deformed individuals, kinda flies in the face of the idea that these Clan Trueborns are the best. The Clan Trueborns also want to believe it is their abilities (I earned honor and glory, I earned a bloodname) that is propelling the eugenics program forward. Essentially, they see it as the perpetuation of evolution. With the warriors as the real driving force here.
The warrior caste wants to feel like the epitome of human evolution. Not lab rats that got lucky. This was part of their indoctrination and education on their place in society. For many of them it's almost as close to their hearts as any religion. There is some human psychology at play here, and preserving that has value to the Trueborns.
In the book Wars of Reaving, there's a passage, written by a scientist, who complains that the scientists haven't been allowed to be real scientists for a while now. That the warriors want them the scientists to move things in nice neat orderly linear steps with fairly predictable results and only work on the areas that the warriors approve of.
In reality, science often moves in exponential growth but also with a lot of not-so-great results through experimentation. But even the perceived failures have value in adding to the layers of scientific knowledge. So if you are going purely by the scientific method you embrace the failures too as you experiment. The trueborns have never been very comfortable with that. A little bit of it is ok. A lot of it threatens to shred the ideas that the warriors themselves are at the helm of the eugenics program through honor/glory/bloodname.
