It's definitely not allowed per the rules. That isn't to say people don't use them of course but generally I would guess they are used on an otherwise quality male who had a retained testicle (more so than to continue to show a neutered male). I actually strongly suspect that is why Neuticals were created in the first place.
The whole point of conformation showing is a competition of how closely the dog physically looks like the breed they are per the standard. Conformation shows have existed far longer than health testing. I remember sitting around after a show with long time breeders, judges exhibitors sharing stories of the lengths people go to to "fix" problems in otherwise show potential dogs - setting tails, removing unpigmented inner eyelids, neuticals in cryptorchids, fixing color DQs, etc, etc, etc. A newbie was like :yikes: "I thought conformation shows were to evaluate the best of the best for breeding purposes". And everyone else was like "Awww...honey...that's cute" :rofl1: :rofl1: :rofl1:
Really though, it's a game people play with their dogs...a bit of a gambling game really. It's fun and exciting to win and definitely to win big. But winning big is not the be all end all of what makes a dog breed worthy. Plenty of show people find health testing extremely important, along with proper temperament. There's plenty of people who show and are extremely devoted to the breed they involved with in all ways. And like in any sort of competition, there's people who are more interested in the competition than the dogs and people who can and will do whatever they think they have to in order to win. It's really, really not that different from other games people play with their dogs other than the scenarios.
Conformation showing is also fairly expensive (sometimes extremely expensive) and most people begin showing their dog before any health testing would be done. If you've already invested a lot of time, energy and money...and more money into your dog's show career then the dog turns two and you find out the dog is dysplastic or the dog turns four and fails to re-CERF do you just say "forget it" and stop showing? Keep in mind showing doesn't equate to breeding.
Then there's also the consideration of breeds which are largely affected by a certain problem. If Pugs had to pass OFA to show, according to OFA's database that would rule out 66% of dogs of the breed which were submitted for hip ratings.