Unless your sister can recover the old Apple Account, there is nothing you can do to unlock the watch. Activation Lock prevents use if the watch is lost or stolen
If your sister still has her purchase receipt, she can take it, the watch and ID to an Apple Retail store to have the watch unlocked.
Recover your Apple Account when you can’t reset your password -
How to use account recovery when you can’t reset your Apple Account password - Apple Support
If you forgot the answers to your Apple Account security questions -
If you forgot the answers to your Apple ID security questions - Apple Support
If you forgot your Apple Account -
If you forgot your Apple Account primary email address or phone number - Apple Support
M1 Mac mini, macOS 26; Watch, Series 10 GPS-only, watchOS 26; iPhone 16, iOS 26; TV 4th Gen, tvOS 26 HomePods, audioOS 26