What a confusing and painful situation! One argument among people who love and care for each other is not enough for this kind of reaction. It makes me wonder if the argument was, for your sister, some kind of “last straw.” Was something building up over time, do you suppose?
Even if that was the case, your sister’s reaction is over the top and of grave concern. I’m especially worried about her since she is isolating herself from friends as well as family. It’s possible that something snapped during the argument and that she is having a breakdown of some kind.
I strongly urge you and your parents to seek out a family therapist – not because I think you’re crazy – but because you all need help figuring out how to help your sister and how to get her back into the family. I simply don’t have enough information to give you good advice beyond that. You are fortunate to live in a city where there are many qualified therapists. Find someone with an “LMFT” license (Licensed Marriage and Family Therapist) if you can. Please follow through. Everyone in the family has suffered for far too long already.
I wish you well.