AHHHH definitely not a good breeder if they're letting people take 2 littermates to the same house :( No wonder she's had high vet bills already :/
Why is that? Too similar a genetic profile, so suceptible to the same health issues?
The reason I've heard expressed most often has nothing to do with the dogs being related but just that most non-expert pet owners can't effectively train two puppies and get them to respect and bond with the human instead of always looking to each other.
This is the exact reason. Two puppies from the same litter in the same house will often become extremely attached to each other and suffer severe separation anxiety from each other. That can be really bad if one of them has an extended vet visit or god forbid passes away early, etc. They also don't form as strong of a bond with their owners, and are therefore less likely to be well trained.
To have multiple dogs you really are supposed to take extra time to work on training/obedience individually, and with two puppies of the exact same age that's really hard because most people don't want to leave one unattended (for valid reasons, puppies are monsters!).
It has nothing to do with breeders worrying about competition. If a breeder is truly serious about maintaining their breed standard and quality of dogs, they wouldn't be selling show quality puppies to Joe Shmoe anyways. They'd be keeping them or entering into co-ownership agreements with serious show homes, who would take the breed standard just as seriously and never breed two full siblings (nor half siblings, tbh).
Breeders who really value their breed and show their dogs in order to be sure they're perpetuating the best quality of the breed have a ton of rules because they are trying to protect their puppies. They aren't engaging in a simple financial transaction; in fact most good breeders that do health testing on the parents, showing, and proper early-life care (high quality food for parents & weanlings, deworming, vaccinations, etc.) for the puppies are barely breaking even, despite charging a ridiculous amount of money for each individual puppy. To them it's a passion, not a business, and that's why they feel so strongly about how their puppies are treated for the rest of their lives. They really don't want to see one of their dogs mistreated and end up in the rescue world. Good breeders will actually take back their dogs from the owners if their life circumstances change and they can't keep the dog, and then keep the dog in their home while trying to find it a new forever home. Good breeders retire their breeding stock after a few litters and then either keep them as pets for the rest of their lives, or find them good homes with trusted people. That's not a great profit-generating model, it's a compassionate and caring one.
Mixed breed dogs aren't predisposed to any one disorder because no one knows exactly what the mix they're made up of is. That just means there's a greater variety of potential health issues, but less statistical chance of having any one specific issue.
FWIW, I have a mixed breed rescue and a purebred who was "rescued" by me from her original home after an unfortunate incident involving biting a kid that was harassing her. I paid nearly $500 in adoption fees for the mutt, and $0 for the purebred. The purebred's got significant chronic health issues and behavioral issues, but at least on the behavior side I can't really blame anyone but her first owner, though temperament is semi-hereditary and good breeders do consider it when choosing dogs to breed (and I'm on the fence about this dog's breeder tbh). The mutt came with health issues caused by his mistreatment (abandoned in a box on the side of the road in Arkansas as a 5 week old puppy! :( :( ) but they resolved quickly and he's never had a behavioral issue except for possibly giving too many kisses :D It's always a gamble. I've never bought a puppy from a breeder and I'm not sure I ever will, mainly because of the financial outlay for my favored breed (over 1k, sometimes 2k) and my sense of obligation for rescue dogs, many of whom are the product of crappy backyard breeders who are only in it for the money.