I’m reading the OPs plan as “Buy one, breed X, keep 2, sell X-2”, not “become a breeder”.
If the original bitch costs £600, they use a stud dog whose fee is the sale price of 1 puppy, the bitch has 4 puppies and the 2 spares sell for £500 each, then the family end up with 3 dogs for a net outlay of the original £600 less any net profit from the litter (which I guess would be somewhere between none and a couple of hundred), plus all the fun of having a litter. (And yes, all the work and possibly heartache too. But they do know what they are letting themselves in for.)
The alternative being an outlay of £1800 for the desired 3 dogs.
I’d feel differently if the family had never bred puppies before, but as the mum has experience of breeding, I don’t see a lot of harm in the plan. I do see how this domestic-scale breeding could annoy a professional breeder, but it’s just one litter, they are experienced, and they want to keep 2 of the pups for themselves.