This reminds me of the movie Augusta Gone. She needs professional help. She needs discipline. She needs chores. Seriously, if she has everything handed to her she will have no reason to use any self-control. No offense to your parents, but it sounds like they didn't have the backbone to discipline her growing up, or even now. And since she's an adult your parents can't make her get professional help, and being of adult age only fuels her disrespect for authority. Your parents do have some leverage, but I doubt they have the backbone to use it, but she needs tough love.
She needs to earn the privileges she's receiving- food, shelter, clothing, etc. Since she is under their roof she should abide by their rules- you may not talk disrespectfully to anyone in this house, here is your chore list for everyday, you may not play music louder than this volume number, you must come out and eat dinner with the rest of the family, and after dinner there will be a brief bible study, and everyone will read a scripture, you must participate. If you do not abide by these rules you may not stay in this house.
I know this seems harsh, but if she does leave she will either not be homeless long before she realizes, or she will stay with someone else and realize they have some kind of rules too and won't put up with disrespect, or she will get her own apartment and have to do all the responsibilities herself. Either way, she may react like the prodigal son and come back humble and respectful. But as it is, it will only get worse if your parents do nothing.
As far as it depends on you, no you are not wrong to not spend time with her. The bible says to not be unequally yoked. We can't always control who we have to be around, but we can control who we treat like a best friend. Let her see and feel the result of her disrespect- make her earn a relationship with you- a relationship based on mutual respect. Do your best to be at peace with her, and show her love, but let her see there's something missing- the relationship you used to have. If you just hand it to her anyways she'll have no reason to put forth any effort on her part, your family is taking away any reason for her to use self-control.
There's a spiritual war going on. The bible says our enemies will be members of our own household. Everyone has a spiritual battle to fight, we are supposed to work out our own salvation with fear and trembling, your family is taking that away from her- unless she has to experience consequences she will never gain the humble attitude needed to work out her salvation. But on your part show her love and peace.
My son came to me once complaining about another kid, with thoughts of being revengeful. I said "Hmm, you should definitely treat him like an enemy!" He sighed and said, "Love your enemies." No matter what, we need to love everyone, even if what's needed is tough love. Start off as gentle as possible, but you may need to get up to being as tough as possible. For example, if a man was trying to kidnap my daughter, and I had ahold of her leg, should I hold her gently so that his strength can take her from me? Or should I hold onto her with all my might because it's better to take her to the hospital with a broken leg than to let her be raped and her different body parts cut up and spread through and river and forest like the son of the host of Americas Most Wanted? If your parents really love her they need to supply what she spiritually needs.