Halfbreeds exist naturally when two different species breed. An example of this is the children of Grouch and Private. Grouch is a duck, and Private is a penguin, and all three of their children are biological, making them half duck, half penguin.
Most halfbreeds do not gain the physical traits of both, while others do. Crabbear has large, bent arms like crab claws, but the rest of his body resembles a bear. Acorn is half owl, half duck, but he appears as a plain owl.