Are you telling me that your nephew was at nursery for four terms and your sister did not know who his key person was? That again is disgraceful.
Your Nephew's Nursery are in breach of EYFS requirements if he does not have a named key person looking out for him.
Every child in a nursery or pre-school has to have a nominated named key person upon joining the setting. The key person takes a personal interest in that child's wellbeing and development. That is a mandatory requirement of EYFS too.
You ask the manager why the hell your sister was not informed of who her son's key person was/is when he joined the nursery.
A decent nursery should inform the child and the child's parents/ carers of who the key person is going to be during settling visits or as soon as possible afterwards. It is polite to do this verbally and in writing.
The key person is the main person responsible for a group of individual children through out the day. The key person should get to know the child and family and look out for their educational and care needs through out the day too, as far as possible ( nurseries being busy places with staff doing different shifts, holidays and sickness this is not always possible) and giving feedback at the end of a session and keeping the learning journey updated. As well as observing and planning individually for each key child that they have.
Most decent nurseries will have a second back up/buddy key person in place for the child for when the child's main key person is absent.
The majority of nurseries will have a minimum a key person list for parents, but most will have a photo of key person/ second key person with photos and names of their key children displayed for parents.
I am appalled and outraged - shitty practice like this just should not happen these days.