If you had the opportunity to get a free puppy with otherwise good bloodlines and health tests, would you accept a puppy from a litter where the dam's father is the sire's half-brother? Why or why not? What are the possible risks or things to be aware of? Links to sources, studies, etc. are greatly appreciated!
Disclaimer: I'm not a breeder, I've never bred a litter, nor do I personally compete my dogs in conformation or sport. That said, as much of a sucker as I am for a cute puppy, I, personally would pass. It's good that you have certain test results, but without additional background information there are too many unknowns in the scenario described for my comfort level. I understand the appeal of a free puppy but, over the years, I've found that the purchase price is often the least costly expenditure that you could encounter if your luck turns south.
Many of those unknowns might be discoverable with due diligence on your part by simply talking to the breeder (e.g., temperament characteristics in previous generations, trainability in previous generations, health issues in previous generations, etc). Other unknowns may not be so easily discovered. Too often it depends on the breeder's openness/honesty about what's behind her/his lines and how well s/he's kept track of previous litters. Some breeders are superb about this, others not so much.
IMO, the real risk in the scenario you've described is the degree of inbreeding that this puppy represents. Yes, inbreeding can 'fix' the characteristics that the breeder is trying to enhance/strengthen. But it also can 'fix' characteristics that the breeder may be unaware of or would have preferred to avoid. Further, those undesirable characteristics may be highly heritable although virtually undocumented as such because genetic testing isn't available or, if available, is prohibitively expensive. IMO, the real risk of inbreeding is that you don't know what you don't know; the results can easily become an exemplar of the Law of Unintended Consequences.
Mind you, breeders run the same risks even with outcrosses. With line and inbreeding, however, those risks increase substantially because the available gene pool, so to say, has shrunk significantly over successive generations.
I've pulled a couple of (not too jargony) articles that might help in your decision-making. Or not...