The dog will only become lazy if it is left unexercised after getting neutered. Most dogs tend to put on weight because their metabolism slows down. However, you need to realize that this is probably not going to correct his nipping behavior.

You need to realize he probably bit your sister as he was trying to demonstrate he was higher in the pack heirarchy than her. Until Grandpa starts to deal with the problem it will only get worse. Eventually the dog may need to be put down if it does get worse. Some states have laws about dogs that bite more than twice. It is an automatic death penalty. Please get Grandpa to see the light and get this dog help in realizing the behavior is not acceptable.