Is it permissible to break off an engagement due to the discovery of a minor disability in the fiancée's hand after transgressions have occurred between the two parties, especially when feeling confused after performing Istikhara prayer?

It is permissible to break off an engagement because it is merely a promise, but it is disliked to do so without need. If the engaged woman is religious and of good character, do not rush to break off the engagement, especially if the flaw is minor. You can continue performing Istikhara (definition) and proceed with the marriage. If there is good in it, Allah will facilitate it; otherwise, He will divert it from you. It should be noted that leniency in interaction between engaged couples leads to transgressions, as they are strangers to each other.