Gotta, for your friend to share her childhood recall with you, even reluctantly, she really trusts you. Handle her story with care.
It is maddening, and you want to do something. Just don't do anything you can't undo.
Though we don't hear much about this kind of sibling abuse, it isn't really unusual but it is way under-reported as most people are like your friend in blocking the memories. Statistics on childhood sexual abuse used to state that 1 in 4 girls reported being sexually abused and 1 in 5 boys reported the same. That is a LOT of abused children, and I believe those percentages may be higher today, but cannot confirm. (These data are from a course in childhood abuse I took in college.)
My own baby sister told me something very similar happened in our home during the summer I was out of state at my grandparents' home, at age 13. My brothers ages 12 and 10 had gotten into their father's porn magazine stash, which was in the closet of their former bedroom after my Mother had booted our father out of the parental bedroom and had banished the boys to the basement, where they were allowed to do 'whatever' unsupervised. Both boys were in the early teenage hormone-fueled developmental stage AND such sexually provocative material should never have been in the house in the first place. I think if they hadn't had a paternal example set of how men "view" women, they would not have thought to "practice" some stuff my sister said they tried with her. The most angering part was she told me this years later because she wanted to find out whether the same kind of "sex play" had happened between me and our brothers - like they told her it had! I hated to have to tell her that was a lie, because I saw how they lied about what went on between us siblings to get her to go along with their abuse, thinking it must be no big deal if her older sister had done that, too!
She told me she called the older of the two brothers at the time she recalled this and he blew her off, not even apologizing. That is sadly typical, as well. He was a drug and sex addict and very narcissistically disordered through his entire life, dying at age 71 without ever making amends with anyone. My sister was a lifelong sexual abuse victim, having married a man who was a sex addict who cheated with drug addicted women and maybe men. He gave her an STD which my doctor said likely could have been the source of her fatal squamous cell carcinoma; she died at age 54.
The whole family is affected by this kind of sexual abuse, and sadly, it is common that the parent who is told of the abuse does not protect their child, either; they too are part of the sick family belief system. She has a lot of things to process with this recovered memory and I am so sorry it impacts your life as well. Can you meet with a private psychologist for a consult on how or when to ask your children about this man?