I still don't have the game in my hands, because there was a -deadly to me- delay with the pre-orders in my local shop, but from what I've seen in other videos, I think it works just like the way it does with human Sims. Some siblings are born identical (monozygotic twins), other siblings get various traits and characteristics from both of their parents. I think, in some videos, a couple of puppies/kittens were born completely identical in numerous occasions and, to be quite honest, I'd prefer a little more variery. I haven't tested the genetics system on my own yet, though. Happy Simming, friends!