You are both correct and wrong here. Sure, daughter-mother relationships might not cary any penalty. But that doesn't mean it isn't legally defined as incest. Incest itself isn't a crime. It can have legal penalties attached in certain cases (as you mentioned, when inbreeding is involved). But that doesn't mean everything else is automatically not concidered incest. The definition of incest is simply a sexual relationship between two closely related family members. That certainly includes a mother-daughter relationship, even if you won't get legally punished for it.
But does this all really matter? I don't think so. I think the incest fetish isn't about the involved characters being at risk of legal punishment. I think it's about the fact that it's seen as wrong by most people and that you would have to keep it a secret. The risk of being caught and judged by other people for you love is what thrills people, not the risk of penalties. Incest by itself provides a romatnic barrier that the couple has to overcome. You automatically get a sort of 'love triumphs over all' sort of story in most games that include incest where the couple find that their love for each other is worth risking being discovered. Another part of incest that I think people enjoy (maybe wihout even realizing it) is that the characters share something deeper than simple romantic attraction. They usually have some sort of history together as family members. So in case of pornographic games, there is no reason to say a daughter-mother relationship shouldn't be called incest. It falls within the definition of the world and the thrill people get from such a relationship is still included in a mother-daughter pairing just as much as it is in a father-daughter pairing (at least I think so). Also... narratively it provides an easy explanation for future romantic characters to live together and interact a lot with each other (so the player can get an early feel for the chemestry between them) with it feeling odd or forced. But that's more of a writer benefit than a reader benefit I suppose
Modern day incest is quite different and is viewed differently from it's perception ages ago. If you want to look back (and sorry if this is kinda too long ago) but at Egyptian, Greek, Roman and in some Medieval times it wasn't soo much frowned upon and you didn't hear stories of "regular people" engaging in it. Usually always nobles/wealthy and especially Royalty (Egypt has A LOT of it)(God's as well, those cheeky bastards) who wanted to continue their lines but preserve any wealth or power their families held. Incest worked more of an "arranged marriage" thing and the general idea that you're with someone that the family knows very well and you could personally trust. What I'm getting at is that there wasn't so much of the "Love" factor involved. Best example is the grandmother of Mithridantes VI of Pontus (Pontus is in modern day Turkey). She lived around 2nd century B.C. and was married three separate times. Her eldest brother became King after their father's death and so they married. Had several children and then he died. She married a second time. To her 2nd Eldest brother. Had children with him and he also died. Then she married for the last time. To her youngest brother with whom she had two children, one of them later becoming mother to Mithridantes. What are the chances that she was fully on-board with all those marriages and deeply loved each of her spouses? Obviously that's plausible however in such situation no one really cared about the "Love factor" because she HAD to do it (back to arranged marriages) and was kinda like "Ok, I know these people very well. Better than some stranger".
Now in modern times you wouldn't be forced into this (obviously some people still have arranged marriages, but not of the kind we are speaking of) and you normally wouldn't think of someone related to you being a better partner than a stranger. Modern times it's either pure animalistic lust between both parties or mutual romantic feelings that would drive someone towards incest. And since our society is so "advanced" at the moment, people know of the potential (but don't know that is NOT guaranteed) dangers of inbreeding, plus since it was ok back in ages of "barbarism" it's a taboo now. And also there's the feeling that if such sexual fetish would be allowed to be explored people might go for and fight for the normalization of other fetishes where you aren't attracted to the "normal" (what I'm saying with this point is that there would be definitely some that would go on to say that if that is allowed we want other taboo things allowed as well, and where not talking about homosexual relationships here). I'd say that Dating My Daughter would be a perfect example of how modern day incest would look like (albeit less "romantic"). Lesbian incest is less unexpected and doesn't yield any future genetic weakening, but as you said it's still looked very much down upon.