There's not a lot you can do, as far as I know, because the denim dye has, effectively, dyed the leather.
So, you won't be able to remove, or cover it, without removing/covering the original dye, too.
I had the same thing with a BV which got colour transfer from my (black) clothes.
Fortunately, the bag was red and black and the colour transfer was also black, so it didn't look too bad.
In a way, I quite liked it, as it sort of smudged and blended the two colours.
I feel like they could do the effect deliberately, like a kind of ombre...
Plus it was only on one side of the bag, so I carried on wearing it that way around.
Does your sister's bag look really bad, or is it bearable do you think?
In my mind, denim blue and red doesn't look that bad, so I would probably live with it, personally and keep wearing it with (washed) jeans (to explain how it ended up like that, but washed, to try not to make it worse).