There are a lot of features in TS3 that are hidden, as in, not something the player can pick as an option or even see in terms of it's not in the U.I. anywhere, if you're observant.
But yes TS3 AMB dye hair feature is not a real dye job and seems to be using the same exact code as changing the DNA hair color. I document my Sims original/DNA hair color(s) so if I "dye" it and any child or children that comes out with the dyed version I will change it to that parent's original/DNA hair color.
The grandparents do not exist because for the child with blonde hair along side the other siblings, their parents are 1st generation, they are the founders.
There's a case where two grandparents both have brown eyes and they are also founders. The parents both have brown eyes too but their daughter came out with blue eyes. Another instance where different founders both have brown eyes and one of their children came out with blue eyes and that toddler was rolled in CAS which I decided to keep.
But these are my experiences and/or tests based on what I see in my game and the basics I know about dominant and recessive traits. It's interesting, I think it goes beyond just hair/eye color too. Some of my Sims features are quite dominating, so much that even some of the grandchildren inherits certain facial features from the 1st generation.
