I believe it just takes half from each parent... maybe with 99% it rounds up so you never get a purebreed again. Let me check and try to randomize it a just a little more. In your example, if one parent is 98% Arachne, you'll definitely get max 49% Arachne from that parent though as is. I want the breeding to be fairly predictable so players can predict the %'s for the offspring in order to target certain hybrids, etc.
Also I've noticed the issue that lips always increase generation to generation and that quickly leads to lisps and muteness. It's honestly really annoying because I have to use a potion to shrink lips pretty much every generation. (I didn't reload the page so I didn't see you had already fixed the issue I stated earlier).