She could be having hyperemesis,...there by not able to eat much..or keep anything down. As one who had a mod form of this...it's very difficult to eat...when you think it's going to come up. I had to learn not to drink anything with my meals...ate mostly dry foods. Nothing greasy, and had to stay away from even smelling anything greasy...even butter! And any
strong smells at all would send me heaving! For several weeks all I could keep down was saltines, and thick mostly dry mash potatoes.
As for the effect on the fetus...there are beliefs d/t one study, that children exposed to high ketone levels have reduced IQs. This to my knowledge hasn't be proven. Most physicans say there "could" be a risk to the fetus.
I sincerely hope your sister in law is able to have an uneventful pregnancy, and deliver a healthly child..