I think it's all left rather ambiguous on purpose, at least in the broadcast episode anyway. The actress who played Sandy was pregnant at the time and I think they had to rather hastly write her out of the programe, her belly is rather obvious in some scenes. Maybe they shot a proper scene of Sandy escaping or Kate clonking her over the head but it had to be cut for timing. Sandys departure is like normal for Prisoner rather hastily forgotten bar a few mentions in the following episode that's it.
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