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For the sake of debate let us assume that both circumstances do not result in any physical harm. The damage is emotional, psychological. If we accept that animals do not have a conscious understanding of the events they would not be harmed in this way. So in a case where there are no good choices, where the term better is not equal to good, yes the animal is less harmed and thus that is the better choice.

Interesting point. But could there exist non-emotionally harmful incest?

I would say yes. The emotional, psychological harm is certainly cultural. If there were no societal taboo there would likely be no harm of this variety. Clearly there have been times and places in human history where those taboos have not existed.

Indeed; arguably with both actually