Thanks @IceCreamKid for sharing your observations. I do suspect my sister has some condition. I just learned about CAPD which often occurs in people with autism or ADHD. And the guy I knew with brain damage, he was only similar to my sister in being unaware that you can't interrupt a class for a personal agenda. But he was not mean and was pretty much the complete opposite of my sister.

The thing about college was that we were allowed to speak politely and voice our opinions. But my sister was wrong and disrespectful to argue with the teacher every day over her quiz score. Each class started with a 10 question quiz to check if we had done the assigned reading. My sister kept getting slightly lower scores than me and she couldn't deal with it so she kept arguing rudely with the professor and refusing to accept his decision about questions she got wrong. Even though everyone else had no trouble understandings the quiz questions, my sister insisted that the entire class and teacher were wrong and only she was right. I don't know another college student who could be so rude in class because she can't accept the grades she earned.

It was a relief to learn about CAPD yesterday because everything made sense. Central Auditory Processing Disorder is where the brain has trouble processing sounds you hear and that explains why she hears different words from what I or other people say. Her brain probably has a prejudice that decided in advance what she expects to hear and drowns out what you are really saying. The symptoms listed on medical sites are similar to what you described in your co-worker.

Now that I think I know what's going on, I can try not to take her insults personally. It's been worse the last 5-6 years because she misunderstands simple sentences and often interrupts me to insult me based on what she thought I was going to say.. She calls me autistic and has off topic rants whenever I say anything. I recently said that I was looking for something in the house, and she heard it to mean I wanted to spend money and started raging about money. I'm not going to accept any more punishment for her cognitive deficits.

What I will try to remember is that her behavior must have social consequences for herself and that will have to be enough justice for me. People must think less of her when she yells at me in public or says innapropriate things like in class. So her behavior will have to be her own punishment.