"Grandma is talking about her sisters."
Translation:Babcia mówi o jej siostrach.
I think you're missing the point! I didn't even notice this on my own, actually. I assumed that "her" referred to the grandma herself, but that might not be the case. If the "her" indeed refers to somebody other than herself, then "jej" would be used indeed. But, from the English sentence, it's impossible to know.