In fact my sister was confronted with a very similar dilemma in 2015. She had been trying to be published since the late 80s and at last she was offered publication by a small but mainstream publisher - after nearly 30 years of trying. She showed me the contract because she had concerns about it - and rightly so. It was a bit of a rip off, overwhelmingly favouring the publisher but I knew she was torn, despite her mild outrage at the contract. I said to her: "Do you have more books in you?" and she replied, that yes, she had lots more ideas. So I said: "If you have confidence in your ability to keep producing, you could just see this contract as an investment in your writing future. This will at least get you onto the shelves and develop your brand."
So she signed the terrible contract. The book has sold over 50,000 copies in Australia (which is a lot here) - she's been featured on major network TV - she's done heaps of appearances and readings - she's made some money (not near as much as she should have) - and now she's very well known in her sector of the market and has signed a much better contract for her next book. She is now in exactly the place she wanted to be as a writing professional.
I was offered a contract by a small publisher back in '03 -- this was in Scotland, so a similar sense of 'well we're not exactly swimming in publishing options on this small island' and also 'this is the only way I'll see a book on the shelves, self-publishing can't make that happen'.
I sold 35,000 copies (which is a lot here! It was a middle-grade book, too, so not the biggest market) and the publisher promptly took the profits and left the country. Attempting to sue has been useless because on paper the company is flat broke, and besides, how am I supposed to sue when I made nothing? Legal proceedings are expensive and stressful.
I'm well known in my local area! I've done heaps of appearances, readings, school talks, TV appearances and news appearances. But hey, guess what, none of that = stable income.
I am currently where I want to be as a writer... but that's because I'm stubborn as hell and didn't give up, not because I took a chance on a unwise business decision. I've moved forward
in spite of bad business dealings, not because of them. I suspect your sister is in the same situation: she got to where she is now by being really bloody good, not because she signed a subpar contract. It sounds like she's working her backside off to promote her work and she's seeing the results of that.
(I'm
very curious about how much the publisher helped her, and how much they invested in marketing her before she took off.)
By saying her success is all thanks to signing a weak boilerplate contract, you're devaluing just how hard your sister has worked for her successes. By not realising how much of an outlier your example is, you are giving dangerous and incredibly naive advice.
Your sister's story is lovely, but it is not how these things usually go.