You are anonymous here, Guest, so nobody knows who you are and so you need not feel shame about what is written.
Yet, shame is good!
I know from my own 'journey' from the hell of being ACON that if you can feel your shame and recognise it for what it is then you are well on your way out of the chains that bind. You'll discover your own narcissism and then a clear path out of the wood - if you choose to take it. But there's a lot of 'owning up' and taking responsibility for your own contribution to the confusion in between. You'll need to be strong!
I do not have siblings - but my mother had a sister (exactly like her) with four children. I've seen and experienced the way they learnt to play each other off against each other...the mother allowed each child to relate only to her and she then orchestrated the relationships each was allowed to have with the other. And narcissistic families always have scapegoats.
And that's the story of your family, too.
My sis (who I think is more narcissistic than I thought) convinced me that mother takes this out on her more than anyone else in the family...
There is no reason to believe that what she recounts as her experience is inaccurate and there's nothing in your description that suggests she is narcissistic - her perception may be true or she may be more sensitised to your mother. Does she not live much nearer, too? So she's easier for your mother to get at? You say that you live 600 miles away and 'don't care' about the rages your mother gets into. Your sister does - why not respect that? Why not (perish the thought!) help her and support her if she does? (Because...see paragraphs above!)
For what it's worth, I think your sister was wrong to take it out on your niece (her daughter, I assume) - you were the one she really had the argument with but she chose an option which felt safer (it's called 'kicking the cat')!

(Why could she not challenge you? What is she afraid of?)
But you were wrong to then 'tell' your mother rather than talking through with your sister the best way of handling it together. Seems to me you dumped your sister right in it! And then with your very next action, you chose to come between sister and daughter.
Once you understand your family dynamic, you will understand that you are only doing exactly what your mother taught you to do : divide and rule.
You could (instead) help bring family members closer together eg support your sister in sorting out the fears that she's currently taking out on her daughter so that their relationship can get better. It's hard to want to bring people together when you've been rewarded for tearing them apart and experienced the 'being torn apart' yourself. (I know!)
I will hold up my hand to the fact that your post pressed buttons for me. I felt outraged on behalf of your sister. I identified with her. She appears to have taken the role of family scapegoat and I fear she's in much deeper psychological trouble than anyone else in your family. It often happens for middle siblings, even in fairly healthy families.
I am so glad I didn't have siblings. I'd probably never have escaped intact. It's tough enough trying to untangle things between mother, father and daughter, much more complicated to work out what's going on when there are more people involved.
But if you can take responsibility for your own role in all that confusion (eg honour a request you agree to or just say 'no' or just don't visit) then there's a good chance of things getting much better for everyone.
Because you 'don't care' you may be strong enough to be the one to lead the others out of it. (But you may find that you care very much indeed - and that will be a time when I will be here to give you the biggest hug of your life!

I didn't care either, but spent one afternoon of my recovery sobbing 'Of course, I care, of course I b***** care!')
You asked for opinion. I have been honest with you. It was not my intention to shame. Your shame came out of your acknowledgement of the truth. I read somewhere recently : the truth will set you free.
Good luck. We all need to know that people are rooting for us to have a healthy outcome. And that's what you'll find here on this board.
R