Do you maybe have some Christian vassals? I don't know if that would cause the event to fire for you, but it's the first thing I can think of, other than an bug.
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It's a province event, not a character event. It can happen to you as long as you have a single province that's Christian in your demesne.
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Two inbred children who are related to each other... All four of the boy's grandparents are of the same dynasty, as are both the girl's grandmothers.
Oh, ok. How can you tell? All the grandparents look unique to me, and I can't see any further than that.
The kids are close relatives, and they're both already inbred anyway. Basically it looks like the AI is trying to make a Russian Carlos III.
EDIT: ninja'd.
I totally missed that they are both Inbred... Now things are making more sense to me, thanks.
STOP! COOKIE TIME