I have 2 of those small foam Little Giant incubators. I had terrible luck with them. None of my birds got splayed leg like that but, I had very poor hatch %. Only 13 hatched out of 42 eggs and only 6 survived past the first day after hatch. That was my only attempt with the foam incubator before building my own.
Back to the subject, I would strongly advise adding a towel of some sort when the eggs are in lockdown. A normal Bounty paper towel isn't very good. Better to use those blue mechanics paper towels. Much stronger and absorb more moisture. That will give your babies a good grip to gain leg strength to prevent that.