Is the practice of some imams reciting Surat As-Sajdah and Surat Al-Insan in their entirety during the Fajr prayer on Friday, or dividing them between the two rak'ahs, a correct practice or an innovation (bid'ah)?

It cannot be said that reciting only some verses from Surah "As-Sajdah" and Surah "Al-Insan" is an innovation (bid'ah); rather, it is a manipulation of the Sunnah. The Sunnah is to recite both surahs in their entirety during the Fajr prayer on Friday, as the Prophet (peace be upon him) did. If the Imam is unable to recite them in full, he should recite two other surahs, and not divide the original two surahs. This is because the Prophet (peace be upon him) used to recite both surahs completely, and everything the Prophet (peace be upon him) did was a facilitation, as mentioned by Anas ibn Malik (may Allah be pleased with him).