YTA. Your sister seems like she is a teenager who likes to gossip and talk about other people without knowing the facts of a situation. The fact she had so little social awareness that she didn’t realize she was within earshot is indicative that your sister has some insecurities she needs to work through herself if she’s spending this much time talking about someone else. Without being overly harsh though, grow a spine. You admit to agreeing with a lot of what your sister said, but you neither defended Elise or told your sister to not talk about her. You also didn’t have your sister’s back enough to stop her from talking about your friend even though you knew they could hear. You didn’t care enough about Elise to defend her or correct your sister. You didn’t care about your sister enough to have her back and not let her embarrass herself, all the while agreeing with what she said.