You can merge records together into a single individual, but that individual can be split again. As you might expect, there are some family trees where people are constantly fighting over the actual events. It's a bit like wikipedia in that way.
2. Yes, they allow very free-form data in the tree. In previous incarnations they used to try to merge everything together into a single 'true' version of events. Since they now just keep everything, they will try to provide a coherent view of the data, but underneath it's all just individual items of data in a massive database.
Previously, the only goal of the mormon church's genealogy efforts was to perform ordinances in biological relationships - biological parents to child, biological parents to each other. That also matched up with the nuclear family structure of the 50s which the church is also in favor of, so the concepts got a bit mixed.
I'm not involved in the project, but my guess is that their current goal is to make their system the single clearinghouse for all genealogical data. If everyone is using it, then the mormon church will always have access to all the data it needs for the ordinances. Merging different databases is a massive pain, it's much simpler to record everything in the same place. Other people will only use this system if it's flexible enough to meet their needs, so I think that's why it's more flexible now.
Heh, this reminds me of an assignment in a Finnish university. A second-year programming course requires to build a family tree parser with the appropriate data structure design.
The tests are automated: students upload their sources through a web form, the backend builds the code and feeds it a number of test cases. The trick is that the inputs are not provided ahead of time. Once a test set fails, the student is provided with the input(s) that broke their submission. A student can submit their code at most four times, and a failure to pass the tests also means a failed course.
One of the inputs is the family tree of the Egyptian Pharaohs.
As to 2. That is a super interesting question, I have no idea.
Their current software spec for GEDCOM can't even handle same-sex marriage.
GEDCOM is rapidly becoming a poor choice for reflecting current reality.
(b) In places with gender recognition law, someone can legally have their new gender recognised, and hence be legally female or male, and be capable of genetically producing children with someone of the same gender.
1) Was there any bowdlerization of the records--any attempt to cover up scandalous lineages that are or were at one time against Mormon norms? (For example, interracial relationships prior to 1978)
2) Are they able to handle cyclical family trees, such as described in this famous stack overflow question: http://stackoverflow.com/q/6163683/67591