Kovu is not Scars son. He alone states that clearly in the movie. Disney made it that way since they did not want Kiara and Kovu to be related by blood. Which makes sense since TLK is family movie and as such must be kids friendly.

Also while Kovu still is Simbas cousin, it is more like half cousin, because Scar is not his father, but since Zira was Scars mate, that makes him relative by marriage, but not blood. There is no real blood relation to Kiara, so Disney probably believed that would not be problem, since they are only related through Zira being with Scar and since Scar was not Kovus father, that breaks all blood relation, which makes it much less problematic.

Scar's not Kovu's biological father, so it would work out. BUT, Zira is Simba's aunt. That'd make Kovu and Simba and cousins, since Zira is Kovu's real mother. That would make Kiara Kovu's second cousin, which would make them related, and make Zira Kiara's great aunt.

they are cousins. disney's hiding insest by saying he is not , when we know scar is kovu's father.

Sort of. Well, Kovu says in the film that Scar wasn't his father and he was somewhat adopted. So, yeah, I guess that they are some kind of distant cousins.