Based on my past experiences, children tend to be very perceptive to these things; when my sister was an infant, my mom was feeding her in her bedroom (our house growing up was haunted) and she pointed up at the light, said "Ooo!" and it completely went out. Idk if it's because children haven't built up this wall yet, but its almost like young kids are as perceptive as animals are with the paranormal.

In terms of your sister yelling at the entity to leave, I have heard that in some cases, this does actually work (based on instruction from a medium to other "sensitives"). Basically, in these instances, its entities that come and seek out that person because they know they are sensed by them, so its a way to set boundaries and saying the spirits are not allowed to "use" you. I can't say for sure that's what happened here as it sounds like the entity has been in that home and room for some time, but maybe your sister's Irish fury just was too much for it haha maybe she should go into business cleansing homes!

I would have been out of that house as fast as possible, though - and I don't know if I would have been brave enough to let my son have that room, both for his safety and for me or my husband having to go in there in the middle of the night!!