I don't think rehoming her is nessecary, since Rosie is only dog-aggressive. There are tons of dog aggressive animals that can be fine with a child.

BUT I will tell of the importance of keeping an eye on a child when around a dog, whether it be a kind dog, a small dog, anything.

I agree that the dogs should be seperated when your sister is away to avoid any fighting that might happen and contribute to any worrying.

If you sister feels that her dog should really be rehomed, I wish her good luck, and I hope that she finds a good no-kill shelter or puts out ads. I'm sorry about her Lucy.