To answer this question, we first need to understand how incest is bad exactly. This has everything to do with genes and chromosomes.
When producing offspring, a mix of the genes of the two parents is combined in the offspring. This is a random process, which is why siblings can be wildly different from eachother.
Normally, both parents are unrelated, so their genes have at least some differences, creating a new combination of genes. When siblings produce offspring, however, their offspring's genes are practically draws from the same genepool.
This means that there is a chance that the offspring gets two identical genes . If both mom and dad got geneA from their father, the offspring could end up with two A genes. This is where problems might occur. Small defects in genes happen all the time, and generally they are caught because of redundancy. Cats have two copies of each gene after all. In most cases, only if both versions are defect, problems arise.
If both genes are identical, we will be certain that these defects will propagate.
The biggest reason animals are biologically programmed to prevent incest is because incest is a evolutionary disadvantage in the long run. Most of the damage done by incest doesn't happen in the first generation. However, continuous incest, generation on generation, will enhance the effect I described above time and time again.
There are many animals, especially those kept and bred as pets, that suffer an enormous amount of inbreeding. A big example are purebred dogs. Without any new genes joining the pool, the entire population of such a breed will eventually start looking incestuous.
But this is on a population level. For a population of animals, incest only becomes a problem after many generations.
So how does this compare with your kitten?
Let's look at the possibilities: Let's assume your cat's parents have disjoint genes: Mom has AB, dad has CD. Their offspring have four possible sets: AC, AD, BC, BD. The father of your kitten has a 1/4 chance for any of those combinations. Each of those combinations, the father shares one gene with the mom. Either A or B. These is a 1/2 chance for the father to pass on the shared gene, and there is a 1/2 chance for the mom to do so. So in the end, there is a 1/4 chance for a duplicated gene.
That's pretty high, especially since this probability applies to each of the cats genes individually, so the chance for any duplicates is near 1, but the chance for all duplicates is not so high at all.
How harmful is this? Unless there were already genetic defects in the family tree of the parents, I wouldn't worry too much. However, it doesn't hurt to sterilize the kitten, to prevent it from getting offspring of itself. Since that is the population effect starting to weigh in.