They filter for red flags that would indicate a potential for failure for the startup. So if a “lack of morals” has no bearing on a startup’s success, then they don’t bother creating a filter that eliminates that. Nerds often prefer building things instead of dealing with people and often take things at face value instead of suspecting intrigue, and that sometimes makes them susceptible to manipulation. PG has admitted that he himself is bad at noticing certain personality or character flaws and that’s why Jessica was the adult in the room. But Jessica was probably observing the founders to see if there was good co-founder dynamic and other aspects that would affect startup success rather than trying to decipher their moral character. After all, there is no hippocratic oath in the tech sector.
Re lack of morals: if I’m not mistaken YC explicitly asks for instances where the founders have succeeded to "break the rules of the system" or similar. So you could even argue if anything they prefer founders that tend to bend the rules of required.
On the other hand, pg seems to have strong moral views on certain political topics.