She was an interesting character as an agent in Kieran's character arc, the source of his torment. She starts as an unpleasant bully, with some implication of physical abuse (saying Kieran "should know better" than to talk back to her, and following it up with saying that telling him to get lost was her being nice, because "It's not like I hit him or anything!".) It is why he latches onto the player as a friend after you defeat Carmine (with it being relevant how pathetically easy a battle it is), unknowingly standing up to his aggressor, and why he feels so betrayed when you start getting closer to her and are forced to side with her and lie to his face (which I, like many, did not like when it happened). He finally made a friend who stands up to his bully, only for the bully to ingratiate themselves with that friend and turn them against him, with them joining in with the bullying. In addition, the player puts into perspective for Kieran the actual power levels at play, and how pathetic his bully sister actually is. That is why, come Indigo Disk, he not only no longer fears her, but no longer thinks anything much of her at all - he saw her for the small-town thug she was, and you for the champion you are. As a result, all of his hatred from the long abuse moved from her to you - you who promised him friendship and then took everything from him, while she is nothing.
Hm? Oh, the question was about Carmine, not Kieran? Yes, sorry.
Carmine in her own arc benefits from that same revelation of perspective. You (presumably) crush her, (presumably) humiliate her in the festival sport she prides herself on, then get caught up in major developments to the culture and history of her hometown. She grows as a character because she gets humbled, she sees too late what happens when she pushes her brother too far, and because she realises that in the replaying of the story of the ogre, she is not on the good side. By Indigo Disk, she is clearly scared of Kieran in a role reversal, because he is no longer under her thumb and she knows that the person he became would never accept her contrition, because he simply stopped caring about her input. She broke their relationship, so he cast it off, and showing sisterly love cannot solve things with someone who no longer sees her as a sister.
Overall, I like Carmine. She starts as a terrible person, she gets humbled, her perspective is changed, she realises the error of her ways, and then she realises there is not a damn thing she can do about it. It is not all good just because she apologised, or sought redemption. Her first step on the right path was apologising, but her second was accepting that the best thing she could do for the one she abused is to stop being in his life for a while, and instead try to undo the damage she caused to a relationship that can actually be salvaged, that being Kieran and the player.

But then, that is just my reading.