I hate to say it, but the only solution to bullying (and it’s not much of a solution) is to escalate the issue to administrators and parents. Over and over and over again, until the administration realizes that allowing these kids to be near each other is exposing the school to risk.

Sounds like the friend is absolutely “negging” your sister, trying to convince her that she’s defective and can’t expect better treatment.

Of course, you can explain this dynamic to your sister – that her friend is trying to build herself up by convincing your sister that she’s terrible. But sadly many people subjected to such behavior internalize it and are unable to fight it.