What happens to Pip's sister in Great Expectations, and what is the result? How might we understand what's wrong with her in modern terms?

To be clear, a lot of things happen to Pip's sister, Mrs. Joe, in the book Great Expectations. First, she becomes the sole caretaker of her baby brother at age twenty, after burying two parents and five brothers. That alone would make anyone a little stressed out, and she is no exception. In fact, the most contentious part of her relationship with Pip stems from her having "brought him up by hand"—beating him—and she is very proud of that fact, as were many parents during this time period who brought their children up this way. Pip may find it hard to understand at first, being on the receiving end of those beatings, but her entire life up until that point had been filled with heartache and being young and unmarried; she had absolutely no help or experience in raising Pip at first. When she married Joe, that was arguably the best thing that had ever happened to her. He was nice, funny, kind, and a good father for Pip to have, although he could not stand up to his wife and he seemed incapable of softening her already hardened heart.
At first glance, she may just seem like an abusive, self-important, evil person. Because of her earlier struggles, however, Mrs. Joe fears abandonment and believes that her only recourse in life is to become wealthy and powerful. She exerts this power over others to stem the very real fear that she has of being abandoned by those she cares for. We can see this in how she treats Joe; she does whatever she can to keep him from bettering himself. Her main focus is on survival and bettering herself through wealth, and we see her pass these values on to Pip, which ends up causing him great tumult and confusion as he tries to sort out his own values. He, like many others during this time, thinks that the greatest achievement that he could possibly strive for would be to acquire wealth and the status of a "gentleman." This is what his sister wished for him, and this is what he learns to value as a small child. The outcome of this is that he does everything that he can in order to be this person and ends up becoming someone that he doesn't recognize or even like very much. The wealth that he'd always desired and that his sister had always desired has proven to be both a blessing and a curse in his life.
If we want to understand why people valued wealth so much, and why times were very difficult for young people, especially young women and children, during the nineteenth century in England, we need to look to history to show us. In hindsight, we can see how child labor and extreme poverty during the Industrial Revolution bred desperation during this time. In the book, we observe how Mrs. Joe and Pip both acted out of desperation and a desire to improve their lives. Mrs. Joe thought that she was doing the best thing, but she had no experience raising children and had never learned kindness because of her harsh upbringing and the way the role of motherhood was thrust upon her.
When she is attacked suddenly and seemingly without reason by an unknown assailant, everyone is confused and suspects Joe. Pip knows, however, that it was his convict's leg cuff that produced her injuries. He does not feel that telling anyone would help or lead to a conviction, so he does not tell. Eventually, his sister heals from her injuries, though her vision, hearing, memory, and speech are affected. She communicates through drawings and Pip finds that her temper and patience have improved after the attack. Today, we would say that she likely suffered from brain damage, which made her incapable of understanding and remembering details from her previous life, such as her anger towards certain people.
Later, we find out through Mrs. Joe's strange obsession with Orlick that he was the true attacker, who hit her with his hammer in a fit of rage. He did this in reaction to the anger she inspired in people through her yelling and berating and always having to be right. Still, Orlick is the type of person who would hurt someone just to hurt them. In many ways, he is the antithesis of Joe's character.
It turns out that this attack was actually for the best for everyone in Mrs. Joe's life. It gives Mrs. Joe some perspective on her life, her values, and how she was treating others. Certainly, it makes her more grateful for the care and love that she has in her life instead of leaving her wondering what her life could be like if she were wealthier. Another strange outcome is that she forges better relationships with others, including Orlick, who spends time with her, though he is confused by her desire to see him after his attack on her.