I wanted to share a little research I've been doing regarding the newly discovered problem with the unique HOME tracker code Pokemon are given when transferred from a previous gen through Pokemon Home and then to Sword / Shield.
I do not own a Nintendo DS or 3DS and therefore cannot transfer previous gen mons (besides gen 1 from Let's go eevee / pikachu) to SW/SH, so I tried a little something to test the new Pokemon HOME app.
I transfered a 100% legal Venusaur from my Let's Go Pikachu to Sword and it was automatically assigned a unique HOME Tracker code. I brought it at a nursery and bred it with a ditto.
At the same time, I generated a rowlet from Sun & Moon (which I do not own) in my Sword copy using PKHex and of course, didn't get any HOME tracker code. I also brought it at a nursery and bred it with a ditto.
I did this to understand whether the offspring would have any sort of HOME tracker code. Although I had already expected rowlet not to have any, I thought that maybe bulbasaur would have one since its parent was legitimately obtained from a previous game and went through Pokemon HOME. However, it didn't have any tracker code, just like the fake rowlet.
What does this mean? It seems that non-legendary pokemon from previous gens - whether or not they were transferred through Pokemon Home or created using PKHex - give you offsprings without any HOME tracker code and they're perfectly legal, they don't need one as they were born in the galar region.
The real problem though is with legendary ones as they cannot breed...