Re: Siblings that are possibly "involved" with each other!
Most likely they wouldn't give the truth either.
Your solution is good. Like any other friend, if something in their personality makes you uncomfortable, it's good to end or cool off the friendship.
I had one thought you may know the answer to if you and wife know the entire family of the brother and sister. Can you rule out if they are step-siblings? That would shed an entirely different light on the relationship if they are not blood related.
Life is messy - clean it up.
May you be so fortunate … To be surrounded by people who will help you get untangled from the things that are binding you. And, may you always know the joy of giving and receiving gratitude.