Sorry to be so blunt, but as soon as I read the question that is what I saw and heard and it was completely definitive. She is living in fantasy land about this other man. In fact, he looks to me like he is already attached as well and I do not think he's leaving the other person. And FYI, your sister may or may not know about the other person, but trust me, she's there.
The core of the problems within your sisters marraige is within herself. No other person is going to change those problems. Leaving her spouse is not going to make it right or better. That's not to say they should stay married, but the point is that her changes definitely need to be made internally. In the end nothing external and nobody else will make it better for her.
I really wish her a lot of healing. Everyone deserves to be happy!