The first thing to do is to take a close look at the split and identify the severity. SUED or Split Upper Eyelid Defect covers a spectrum from a slight 'notch' in the upper eyelid, which causes no problem at all, to a more severe split where the eyelid looks almost as if it has been torn and stretched by the eyeball. This may, but not necessarily, require a quick stitch to repair. Other variations include a tuft of eyelash which points downwards onto the cornea and causes irritation, and something I've heard of but nor seen, a scratch to the surface of the cornea, which must be very painful and might justify destroying the lamb.
Most of the degrees of split eyelid are no bother to the sheep and just need you to keep an eye on them for a lot of weeping or an eye infection, which would require treatment as any other eye infection, with something such as Orbenin.
If it's anything more severe than a slight notch, then you are right - you wouldn't want to breed from this animal so it would go into the meat queue. In fact the basic research for the inheritance of SUED hasn't yet been done to any satisfactory degree. There are plenty of opinions about it (including mine
) but it's mostly based on individual experience and supposition. One difficulty of carrying out detailed research is that breeders don't want to admit to having the condition in their flocks, although it will inevitably pop up when you keep multi horned sheep.
SUED occurs in all multi horned sheep breeds, of which there are several in the world. In Britain these include Hebrideans, Jacob and Manx Loughtan. Sheep of these breeds which are genuinely two horned will not display or carry the condition, which seems to be linked to the 'splitting gene' which gives the multiple horns. SUED can appear in polled sheep of a multi horned breed (which would seem to be genetically four horned) and may occur in crosses as you have seen, whether they are polled or multi horned.