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You do get the option, though there's a lot dialogue between them is still as though they are related despite selecting that they aren't.

Another NPC does remark "I'm surprised that you two aren't related", so perhaps it's a bug or was accidentally glossed over when writing.

I thought that that npc remark was for people who chose best friend instead of sibling?

It is. That's what I mean, some dialogue like that and then there's some between the player character and Iris that doesn't really fit being best friends. Sorry not being more clear

ah yes,I'll agree with that. Mostly sibling is just replaced with best friend but let's roll with it ig? That's what I do at least