Hmm, I'm on the other side, having had this done to me. I chose the name I wanted for my daughter years ago. Everyone was aware of it, but it was then picked by a close family member as their child's middle name. They were pregnant first, but I was already pregnant when they announced the name. I was pretty upset. I know its only a middle name, but if it wasn't important, then why give it at all? For me, these people often did as I did and it was driving me batty as it was, so I couldn't sit back and not tell them I wasn't upset by something that really mattered to me. So they changed their middle name - and then someone they knew heard their new name, liked it and used it, and my family members were upset so they totally got where I was coming from then.

I'd probably be open and talk to your sister. If you aren't close, then maybe it won't be an issue, but in my case, the whole family is close and we've always made sure that each name is unique from each other.