I wonder if Optus cottoned on somehow that you weren't paying them as a ISP, but had an active Optus account (even though the email account was attached to your sister's).
This is relatively easy for an ISP to do by seeing what IP addresses are accessing an account. If the same, non-Optus IP is accessing the account but an Optus IP is not (such as in your case), they may have an automatic cancellation in such cases. Maybe since a Optus IP had not been accessing the account, they may treat it as inactive through an registered/paid Optus user.
The Terms and Conditions don't give clear grounds for cancellation of email accounts. The only information relating to cancellations appears in their fair go policy.
Optus is also clear on their website that if one does not have them as their ISP, email accounts can be deleted....for example, if one has Optus as their ISP and then changes to another provider, they will automatically delete the email account and any other data retained on their servers and attached to the user.
It appears that Optus doesn't want to be a 'public'/free email server.
Notwithstanding this, Optus would have seen the account was active (accessed by a non-Optus IP) and should as a courtesy, provided notification that the email account was about to be deleted. They possibly also shuld have indicated the grounds for the cancellation to allow a review/appeal process. They should have also indicated that if the account was ultimately cancelled, any valuable information is contained on their servers it should be removed before the deletion.
@TheBBG is right about Thunderbird. It can also be set up as IMAP as well meaning that actions carried out in Thunderbird are mirrored on the Optus server (e.g. when email is deleted in Thunderbrid, it is deleted on the Optus server. We run Thunderbird as POP for the purpose of keeping/archiving some emails for future reference.
I would also be using email software, like Thunderbird, to store a copy of emails on the Optus server, as it likely the account could be cancelled unannounced again in the future. At least with the next cancellation, you will have a copy of the emails up to the date the email account was last checked before the cancellation.