My sister and her then-boyfriend starting living together while she was pregnant. They didn’t get married until their daughter was 4 years old, and I think they did it for the right reasons (not agreeing with all their choices in this time, just their choice in postponing marriage).
In their case, the pregnancy was not planned. She was almost 19 when her daughter was born, more than half-way through college, and ambitious. Her bf, however, wasn’t showing that he had what it takes to raise a family and she wasn’t sure that she didn’t want to leave him if he didn’t shape up. Basically, she waited to marry him until she was sure that she believed that they were marrying out of a desire to commit to each other - and not out of a desire to commit to their daughter. During that time of discernment over the sacrament of marriage, they both grew in faith, and even started living chastely for a short period before their wedding. They continue to take marriage very seriously, and are an amazing couple and very inspiring.
Maybe your older sister has similar ambivalence - this is the father of her child, and she wants him in his child’s life. However, that may not mean that she wants to live with him “until death do us part”.
Another mentality is that a marriage is “just words” and that they are, in a way, MORE married because they stay together from choice and not from legal or religious bonds. Yes, we all know the flaws in this reasoning (like, if you give yourself that freedom to leave, then when things get rocky you are likely to use it - or your SO will), but it exists.
We also have friends who lived together for a decade because they wanted the whole family to be there for their wedding, but for whatever reason that never seemed likely at that particular time. They finally got married a year or so ago, after getting tired of waiting for just the right situation. It was pretty much just apathy about the state of being married - having family there for the big party was more important to them than living together as man and wife, and not bf and gf.