This sounds like predatory behavior honestly. According to your post, when they met she was 13 and he was 20. She was a literal child. It seems like he’s always been inappropriately interested in her. Remember this is NOT your sister’s fault at all. So jealously really shouldn’t come into play. I think you know the truth deep down. His comments about a threesome with her are not funny and wildly inappropriate. But for argument’s sake, let’s just say it WAS a joke... do you really want to be with someone whose sense of humor is asking about having sex with your sister??? Gross. Dump him. You see the red flags. And tbh get him out of that house so your sister is safe and won’t be creeped on anymore.