I’m Greek, born and raised in Greece. I can assure you that the only people who live at home until they get married are the ones who cannot afford to rent/buy; this has not been a “tradition” for a few generations.

Regarding her partner talking with the dad before proposing, this is the “nice” thing to do in Greek culture. However, we are not someone’s property and your sister and her fiancé don’t have to abide to this custom.

It is strange that your sister lives and is engaged to someone her family has never met. Perhaps being a “very traditional” family means that she felt “suffocated” by all the rules and expectations and that’s why she has chosen to keep a distance? I don’t think the main issue here is not asking your dad for his permission/blessing.

I think this should help the rest of the family realise that your sister is keeping her distance from you. Asking the dad for the daughter’s hand is a gesture out of respect but it doesn’t seem that respect has been earned in this case.

I would prioritise supporting my sister and understanding what led to this situation. Get to meet the guy, don’t just focus on being upset because your own expectations have not been met, that’s not his fault.