"Is this going to be a problem?"

Which part?

🙂

The issue for 2019 would be whether the sister would be claimed as a dependent by the other sister or not. Did you amend 2019 for that non-filer/non-working sister, or let it stand? Because that was a Prepayment. The reconciliation is 2020 tax year filing.

"BTW, my client made too much money for any EIPs"

There has not been anyone sending out their goons to come door-knocking to collect, though.

"My client wants to claim sister as a dependent & HH for 2020"

Whoever files 2020 for/with the non-filer/non-worker is going to enter that they got the money and how much. Because "they" got the money. They can fight between them who should have had possession of it; the IRS doesn't control this part.

"And if the sister received the EIP3, she would have to pay that $$ back, right?"

EIP3 is part of 2021 reconciliation.

All of this shows if they get their Tax Account transcript.