Play With Genetics = hair, eyes, skin tone, sliders, clothes (although of course clothes are random and can easily be changed). But not traits. It's essentially the same function used when creating sims from scratch in CAH where you already have two parents made and click the little pacifier button.
Yes, it works on any sim in game. You click on the target sim, then select Parent A and Parent B (the genetic donors but they don't really have to be related), arrange the donors on the left and right side of the screen, and click away on the re-rolls. You don't have to save the results at any point especially if you are just messing around, "X"ing out closes the interface with no changes made.
One kind of a gotcha, don't try to use a teen as one of the genetic donors as the interface will freeze. We have to lock those out as unacceptable choices one of these days.
EA vs. SP Genetics = Either way, I still get a fair number of single parent clones born in my worlds. Not as many with SP's genetics than with EA's, but still more than enough. One out of ten births sure, I can see would look just like one of the parents. But not eight out of ten, that's ridiculous. So I end up in PWG pretty often doing the rerolls after a bunch of kids somewhere in the world are born or age up to toddlers.