The description of this egg on some websites is as follows:
Development of the chick usually takes 28 days, but balut is an egg that has been incubated for only 18 days, during which they get a real embryo with a primitive skeleton.
When the egg reaches the age of 16-20 days, it is ready to be taken to market, where it will be boiled for thousands of customers who enjoy this food. This depends on the size of the egg. The egg that is 18 days old is the best. The sellers wash the eggs thoroughly with sponges, then when they are perfectly clean, they are put in a pot and boiled. End quote.
With regard to the ruling on eating the egg with the embryo that is not fully developed, the ruling is that it is haraam, because it comes under the heading of eating maytah (something that has died without being slaughtered properly). Eating maytah is definitely haraam according to Islam.
The scholars of the Standing Committee for Issuing Fatwas were asked about the ruling on eating this egg and they ruled that it is haraam.
They were asked:
When we visited the Philippines, we noticed that the people of that country commonly eat a dish they call balut. This is a chicken egg that is placed in an incubator until it develops the form of a small chick with all its features. Three days before the egg is peeled, they cook the egg in water until it is done, then they break the egg and eat the chick that is inside it.
Please advise us of the ruling on eating this food.
If the situation is as described, then the chick is regarded as maytah (something that died without being properly slaughtered) and it is not permissible to eat it, because it had taken shape inside the egg, and the prohibition on maytah is something that is well known and well established in Islam. End quote.
Shaykh ‘Abd al-‘Azeez Aal al-Shaykh, Shaykh ‘Abd-Allah ibn Ghadyaan, Shaykh Saalih al-Fawzaan, Shaykh Bakr Abu Zayd
Fataawa al-Lajnah al-Daa’imah (22/305)
And Allah knows best.