Yes this is possible and also VERY problematic. Inbreeding leads to a vast array of medical risks for the pups of this litter. This could be anything from a metal retardation to extreme physical ailments and deformities.
This is absolutely possible. While the idea may seem incestuous, many purebred dogs are actually the result of inbreeding. Such a pregnancy may result in rare genetic disorders.
Yes, it is definitely possible, but such a breeding stands a strong chance of increasing birth defects and other genetic issues. Consider terminating the pregnancy in the animals' best interests.
There no restriction to make a sex contact between male dog and female dog either they are born together for a dog. There is no relationship sensation to any animal except human being.