It is likely that Code received a karma seal before Kawaki but his body wasn't able to become a vessel for whatever reason. Yet he still has a karma seal and Ishiki's consciousness within it. My guess is that he was able to receive the Otsutsuki genetics but his body couldn't handle the transformation into Ishiki. If that is true then he should have full control of karma ability by now and his DNA should be 100% overwritten. Of course Ishiki could be lying to him and waiting to pull a Kaguya when the time is right.