I'm so sorry hun... regardless of wether or not one child was "provoked" by another, it's NEVER Ok to just allow them to hit or scratch another child. If that was my kid, I would have for sure stepped in and they would have been punished or told No (age appropriately)- as I know they may not fully understand what is or isn't OK when they are really little... you can't just tollerate that behavior and think it OK. What if she truly hurt your 6mos old- even if on accident, that would be horrible.
Honestly, if I feared for the safety of my child because of another kid (no matter who that kid was)- I would keep them away. I know it's hard as she is your sister, but she obviously doesn't repect you enough to intervene when her child is out of control. I can't imagine allowing my child to hit ME, let alone another kid. Yes, these things do sometimes happen- as most kids go through that stage where they are selfish and want everything to be "mine" etc... and hitting or biting or kicking isn't abnormal at all, but the parents should still step in. A friend of mine's kid would accidentally choke another baby while she was trying to "hug" her. It was totally on accident- but the mom still stepped in and stopped the behavior quickly. She eventually grew out of doing that and understood better... but until they do, that it the parents JOB!!!
Least that is my two cents... long winded

Best of luck hun.
Also, if you do want to mend the relationship going forward- maybe try approaching your sister when you are both calm and not around anyone else. Let her know how her words really hurt... maybe you both just need to hash some stuff out? It sometimes happens with friends as well as siblings. Maybe clearing the air will bring you closer? Maybe worth a try if you think so...