What is the ruling on the actions of the fiancé and the sister in the story mentioned, and how can one regain self-confidence and trust in others after this experience?

Dissolving an engagement without a legitimate shar'i (Islamic legal) justification is prohibited, as it involves breaking a promise and violating a covenant, which is blameworthy in Islam and characteristic of hypocrites. However, if one of the parties discovers something that necessitates dissolving the engagement before the marriage contract, there is no sin in doing so. Therefore, what the fiancé did is inappropriate. Even worse is the sister accepting his proposal while he is still engaged to another, and even worse than that is her actively seeking it. The wronged sister should be patient and rely on Allah, and she should not cut ties with her sister.