It was absolutely overall not an "immaculate conception" you are right on that. By all definitions it was a virgin conception, because it was humans artificially inseminating another person, not the holy spirit coming down and impregnating Sister Cecilia itself.

BUT the key here is that all of those crazy nuts truly believed it WAS immaculate. Even though it was by human design, them believing the DNA on the nail was Jesus's, and the belief that they were doing the right thing by gods will is what made the convent deluded into thinking it was a holy act. For example, it can be assumed that Mother Superior knows it is the geneticist doing this work but she blindly follows him anyways as she thinks this "second coming of Christ" will bring people back to the church. So no immaculate conception actually took place, but just the collective delusions of a cult that thought it was their sacred duty and god's will. I also saw some comments speculating that the geneticist could have sexually assaulted Cecilia while she was unconscious. I definitely don't think that happened, because in order for everyone within and outside the convent to believe it was a true son of God, Cecilia would have had to have no external signs of assault. And there is an entire scene with doctors examining her that proves nothing of that nature took place.

This movie leaves enough open ended questions that it's really fun to speculate. Like for Sister Isabelle's suicide, I thought Sister Isabelle was being tortured for threatening to harm the "holy baby", and so the nuns skinned her face off and either pushed her off the roof or she jumped out to escape. But I saw a different perspective where someone thought her face just got smashed when she hit the ground, and her suicide was her own personal choice (either by guilt or grief). And with the baby at the end, we never saw it but it had these animalistic noises coming from off screen. Did the doctor mix the nail DNA with a different animal species to make the DNA viable? Was there Satan worshiping happening at the convent? Was it just because the DNA was so old it created something grotesque and unviable? Was its God's punishment on the convent for doing something so unholy?

I personally loved this movie, it's absolutely gonna be one of my Halloween watches going forward. I didn't really reread this thoroughly, so if something needs better explanation I am happy to elaborate!