I think there may be confusion here between Defra's records, which give exactly no stuffs about the parentage of any sheep but always know to which holding any sheep are registered, from the point of their first move onwards, and the Breed Society's records.
The Defra stuff is a legal requirement, and Defra do know which sheep are at which holding from the eartag, leaving and destination holding information on the movement licenses.
The Breed Soc stuff is entirely optional, and many new owners do not bother to update it - and why would you, when it costs you money to do so and is of no benefit to the new owner whatsoever unless they are planning to sell the animal or its offspring as registered pedigree.