Basically, think of the transitive property like this. If I'm wearing the same color shirt as my sister, and she's wearing the same color shirt as her friend, then I'm wearing the same color shirt as her friend. If that bolded statement is true, then the 'same color' stuff has the transitive property.
But let's replace 'same color shirt' with 'within a mile of'. If I'm within a mile of my sister, and she's within a mile of her friend, I'm not necessarily within a mile of her friend. we could be all in a line, making me two miles away, or right on top of each other. This sort of scenario means that "within a mile" stuff doesn't have the transitive property.
I'm saying the same is true for family relationships. So it's fine that she's a sister to someone I'm not related too.
As for her having problems marrying the brother, the issue there is the blood. They wouldn't actually have the instinctual revulsion for having relations with each other that most siblings develop as they are raised together, while I do have that revulsion. This actually leads to problems to unknowing siblings separated at birth. They frequently feel attraction because of similarity of looks, not knowing they are related.