A mutation is not necessarily a defect. It depends on the environment the animal is in. Genes mutate all the time and its a natural process that sometimes causes the development of new species. Sometimes a mutation is linked to a genetic defect and those are known as lethal mutations. Not all mutations are lethal though. Most of the problems seen today with mutations are a product of selecting for color rather than the overall health of the bird. Which leads to inbreeding in order to produce a whole bunch of a certain color and from there on out crossing splits(heterozygotes) to visual mutation which basically means the family tree doesn't branch very much.
Just for the record, we are all the product of mutations. Blue eyed humans...mutation. Red hair, blond hair, different skin colors, curly hair, straight hair, tall, short, ability to digest lactose into adulthood...all mutations. None of which are necessarily lethal. If the bird was out in the wild, the environment would likely select against unusual colors. In captivity with no pressure from predation or need for camouflage, being a different color is not necessarily a disadvantage. I do wish more breeders would use some genetic common sense in producing mutations though rather than being lulled into a thinking they are doing right by crossing visual to split. After enough generations of that, a green bird with a strong family history of mutations is just as likely to carry genetic weaknesses as its mutation siblings.
As for eyesight, I've had red eyed birds in the past. They all seemed to be okay. I don't know about princess parrots though.