Just on the side of open mindedness:
As long as all parties can and do give their legal consent, it's none of our goddamn business to judge what they do in the privacy of their own homes.
Also, the grandmother is post-menopausal, there are none of her eggs left to fertilize, so the kid's biological mother will be the egg donor, and thus the child itself will not be a product of incest.
On the side of worrying about that child:
Open-mindedness is nice, but it's hard to imagine a situation in which a child would get MORE teasing, bullying and general harassment, not only from children his or her age, but from adults who share the views prevalent on this site, not to mention heavily religious people. This child will be walking blasphemy.
I also agree with the assessment that 100 is a rare age to live to, especially without incapacitating conditions, and the father will either become a widower single parent or the custodian of two people incapable of supporting themselves.
I'm not entirely certain they have thought through these consequences to their actions.