Not in any technical sense incest, agreed. No sense of “genetic-in-breeding” in the specific conception, but nevertheless a little weird arrangement.
“Beautiful” if you’re a geneticist / biologist that Mary chose her brother to be the “biological” father of her “adoptive” child, as sperm donor to her marriage partner, specifically to have some genetic tie with the child. Neat solution to the wish, I’d agree.
But the father (brother) living with the biological and adoptive mother in the same family household as “Daddie”(?), and the idea of choosing a donor for their genetic content for a non-medical reason(?), are both worthy of ethical committee scrutiny as possible precedents. I’m uncomfortable with both. Being possible, doesn’t make it good. (The “love” is not in doubt, but the underlying issue here as in other means of “assisted conception” is whether parenthood is in any sense a “right” – sufficiently strong to push other ethical boundaries.)