Hi, I am sorry you are in this uncomfortable situation.

Generally speaking, people who have a habit of gossiping, gossip about everyone.

It's impossible to know what drives this person's behavior.
Her behaviors are about her and not about you. Don't get hung up on trying to understand her erratic behaviors, just accept her for who she is and remain mindful of what that means.

While it's nice you respect your elders, in a work setting, there is nothing wrong with you kindly setting some boundaries with a co-worker.

I'd be civil at all times; yet, remain mindful of her erratic behaviors. I'd be forgiving; yet, would remember I probably cannot trust her with anything more than a superficial relationship. It's a work relationship. Look for people capable of deeper, more fulfilling relationships in your social life.

Just my two cents!
I wish you the best!

WC