Gifts aren't mandatory, so her sister shouldn't have any expectation at all.
I have four kids.
My brother has four kids, plus a stepson (and I'd consider him a nephew, too - except that his mom has never made that possible).
My sister has four kids.
For a long time, I had an only. My brother had all his kids, and I still had an only. My sister had her first two kids, and I still had an only. I had dd1, and my sister had her twins three weeks later. At that point, I was gifting the nine children of my siblings, and I still only had two. I never cared, and it never mattered. (The only hard part was that I was ttc and having three miscarriages through all this, and it hurt that they had all those kids, because I didn't.)
It doesn't matter now, either. My sister is on a very limited income. I spent more on my 8 year old nephew's gift than my sister spent on all my kids combined (I know this, because I was with her when she bought one of them, and I bought the other one for her, because she's in the hospital). DS1 got a small gift card - and loved it, because it combined with other gift cards and he was able to buy himself something he really wanted, without spending any of his own money. DD1 and ds2 got a combined gift - a 24 pack of PlayDoh. They loved it. DD2 didn't get anything, because she's a baby. My sister and I discussed that ahead of time, because she just wanted to make sure I was okay with it. I'm thrilled that my kids have a new pile of PlayDoh to enjoy. So, I bought four gifts for her four kids. She bought two gifts for my four kids.
You know what? I don't care what she spent on us. I wouldn't care if she'd spent half that. My kids wouldn't care, either. I don't care that we spent more or that we bought more gifts. Actually, if she'd done a basket of baking for the whole family, as she did a few years ago, we'd have all been thrilled with that, too. I'm not into expecting things from people, or getting bent when they don't spend what I spend or do exactly what I do, yk? One year (before we had kids), my sister picked out a $0.99 bookmark for each person in our family. That was about 20 years ago, and we still remember it, because she put a lot of effort into picking out just the right one for each of us.
I wouldn't (didn't) have an issue with shopping for the children of my siblings, even if there were way more of them than I have. OTOH, I also wouldn't get bent about whether or not my siblings spent money on my kids. That's just not what it's about to me.The only time financial parity enters the world of gift-giving for me is in making sure all my nieces and nephews receive items of comparable value, because I don't want any of them to feel slighted.