So long as the lambs that are born, are not used for breeding, and are going for eating, it should be fine. My pygmy billy got his daughter in kid (before I got them),  She kidded, but the billy was dead.  I don't think this was due to them being related, just one of those things.  To set your mind at rest, it was fully formed, full term, and had 4 legs, two ears and everything else that it should have.
Its not something I would recommend, but its happened, and hopefully all will be well.