Why is it out of order? I really can't understand why "my sister is livid" - I;d be flattered. People can (and do) call their children whatever they like - and in future years, your sister probably won't live anywhere near this friend. Many people don't have the initiative to be original so do copycat things - after all, "imitation is the sincerest form of flattery" ,so it's a tribute to your sister that the other woman likes the baby's names so much.
Don't *** on FB, it's not a pretty sight - and she's done nothing wrong. If your sister wants to do, tell her to do it herself - don't get drawn into it, IMO it really isn't anything to do with you.