would the fact that the project is headed by a sibling detract from its value?
In certain circumstances it could detract from the overall look of your employment record. For example, if it somehow looks like you were unemployed and your wealthy sibling did you a favour by giving you a fake job, then that would detract from the value of this job on your resume compared with a "real" one.
That's irrelevant to your case. You haven't even graduated yet so it doesn't matter whether or not you have a steady employment record.
So far as the project itself is concerned, the value comes from you being able to talk about what you achieved and what you learned, not how you got the job in the first place.
since my code won't be open-source, would that also count against me?
Unless you're applying for a job working for Richard Stallman himself, the fact you've previously worked on proprietary software won't count against you. Maybe not even then.
All it means is you likely won't be able to offer the code itself, in the event they ask to see something you've written. If you're applying to a company that asks for that sort of thing, do your best to find or create other code you can show them.
Since you say "my sibling is developing an app", I assume you'd be doing work-for-hire for them, and they'd own the result. So you could seek your sibling's permission to show the code. Chances are you won't get an interviewer to sign an NDA or whatever, so if your sibling is running a serious business around this app they would need to be chilled-out to quite a high level to agree.
So, if you're going to ask, ask in advance. You don't want to put your sibling in a difficult position where you're saying, "aargh, I've promised to show them something and this is my best work, please can I show them this, I need to know by 5pm?". Whereas if you say, "I might need a portfolio in future, can I include this work?" then they can say "yes" or "no" and you can decide whether that affects whether you work for them or not.
Also be aware that contributing to an existing open-source project doesn't guarantee you'll produce something worth showing. If you write a new component from scratch within that project, then great, that'll do nicely. But sending them a diff of your changes to 27 files, each of which you touched 10% of the lines fixing critical bugs, proves you made a great contribution to the project but it isn't exactly what they mean if they say they want to see a project you've written.