Feedback fraction of Colpitts oscillator
during an LTSpice simulation if we set C1 = C2 the oscillation is not
underdamped. How is this possible since we will get a feedback
fraction of 1 and the voltage gain of a BJT is always less than 1 so
the oscillation must die out?

Your amplifier (yes it's a voltage amplifier) is a common emitter configuration and it will have bags of voltage gain.
If you were using a common collector transistor then voltage gain would be slightly below 1 but the \$\pi\$ network would introduce voltage gain and permit circuit oscillation.
Here are the three main types of BJT Colpitts oscillators: -

Picture from here and yours is the middle one. Related questions: -

How does the Colpitts Oscillator reach a loop gain of 1?.

The above answer contains the proof that the gain of the \$\pi\$ filter is -C1/C2

Amplitude stabilisation of LC oscillators