Hi! Bilateral means on both sides (both knees) LP is graded on a 4 point scale. 1 is a slight luxation and 4 is severe. Typically they recommend surgery for 3-4. My Sammy had surgery on both knees for her grade 3's and they are better but not great, they still pop out sometimes. We chose to do the surgery because it was affecting how she walked. We were also told it was best to do the surgery before age 2, so we went ahead with it rather than wait and see if it got worse. (The surgery grinds the bone down where the kneecap fits into a groove. LP occurs when the groove is not big enough and the tendons are not tight enough, causing the kneecap to slip to the side. With a grade 1, this will only happen if you physically touch the kneecap. Grade 2 it happens when the dog is running but the dog is able to slip it back into place on their own. Grade 3 is worse than grade 2, but it is still able to go back into place. Grade 4 means it will stay "slipped" out of place until someone manipulates it back in. Grade 4 is extremely severe.)
He is correct that many toy breeds have LP. That does not mean that they *should* have LP. Breeders should take care to try to breed out this condition, but sadly it is quite accepted, especially a grade 1 or 2. The problem is that a grade 1 or 2 can develop into a grade 3 or 4 with jumping or injury. Sammy was probably born with them, as severe as hers were. Loki has grade 2 and he is 4 1/2 and his do not seem to be getting worse, although they can develop arthritis later. The breeder should be advised, but will likely not do anything. They will even sometimes blame you for allowing the puppy to jump.
You can add glucosamine to the diet and keep your puppy from becoming overweight. You can try to keep her from jumping, but that's not always easy. Sammy can jump ON the couch, so I can't exactly keep her from jumping OFF the couch, but I wouldn't allow them to jump from your lap or anywhere higher than they can get to by themselves.
I hope that helps! Congrats on the puppy!