I guess it depends on the organization. We never heard hints that anyone thought it was improper.
Kind of funny - I was supposed to do wood research with a professor but he was waiting for funding and for the first semester I got paid but had nothing to do. Then the funding fell through, so they put me on one of my dad’s projects! But officially, the other professor supervised me. I enjoyed working with a material that he helped develop in the '60s and gained a lot of recognition for. 