I don't really mind line breeding for colors or traits. But don't like things like blood parrots or any mixed species. But each their own, I will always opt for the most natural form.
There is a huge difference between wild hybridization in African and CA/SA cichlids. There are far more wild African hybrids because most live in lakes and closely together. CA cichlids are more isolated and live in Lakes, rivers and cenotes. Variation will be drastic depending on the sp. Even some have become so isolated they are now considered a new species. The evolution of old world and new world are very different due to habitat IMO.
Some closely related CA cichlids that live in close groups together like thorichthys meeki, and pasionis. As far as I know and read, hybrization is suspected, but not common. It is thought they should interbreed like Africans, but don't as much. My theory or hypothesis that a species will most likely breed with their own kind if present. If their own species isn't, they will chose another species. Having groups of 3 different thorichthys species in the same tank I have noticed each species sticks together. I bet one day pairs of each kind will happen with no interbreeding. I have read threads on The Cichlid Room Companion that many don't advise mixing thorichthys species because of possible hybridization. I disagree and if it was going to happen, I could split pairs up if needed. I'm not worried about it.