One possible plotline could be that Naruto is under some sort of dark magic or mind control. Maybe an enemy has found a way to manipulate his actions and make him turn on his friends. Another could be a situation where Naruto is tricked into believing his friends are actually enemies in disguise. For example, if there was a powerful genjutsu that made him see his friends as threats to the village.
It would change it drastically. Naruto is known for his loyalty and friendship. If he were to kill his friends, it would shatter the image of the hero. His friends like Sasuke, Sakura, and Shikamaru are important to the overall story and relationships in the Naruto universe. Their deaths at Naruto's hands would create a huge rift among the other characters.
His other friends like Shikamaru would be in shock. Shikamaru, who is usually calm and collected, would struggle to come to terms with Naruto's death. They would all have to deal with the loss of the village's hero and a great friend, and it would likely change the dynamics of the entire group.
This is a really dark concept. In fanfiction, such a scenario might be written to explore extreme emotional distress. Maybe the author wants to show how much pressure Naruto has endured secretly, and on his birthday, which is supposed to be a happy day, it all becomes too much to bear. However, in the original Naruto story, Naruto is a character full of hope and perseverance, so this is a very different take.
Sakura might be initially shocked as killing is a serious matter, but then she would understand Naruto's reasons if she saw the cruelty of the Celestial Dragons. She would support him in the end. Kakashi, on the other hand, would probably be more analytical. He would first assess if Naruto's actions were truly necessary and if there were any other ways to deal with the situation. But once he realizes the nature of the Celestial Dragons, he would back Naruto up.
If such a fanfiction exists, one possible reason could be a mind - control situation. Maybe an enemy uses some powerful genjutsu to make Naruto believe his sister is a threat, causing him to kill her accidentally. Another reason could be a misinformation plot where Naruto is tricked into thinking his sister has committed some unforgivable crime against the village.
I'm not aware of any official 'Naruto kills his sister' fanfiction. This goes against the general nature of Naruto's character who values family and friends. Fanfiction that involves such extreme and out - of - character scenarios might be very rare or non - existent in the mainstream Naruto fanfic community.
One possible reason could be that Naruto is afraid of endangering his friends. He has many powerful enemies, and he might think that by staying away from his friends, they won't be targeted. For example, Orochimaru was always after Sasuke, and Naruto might fear that his closeness to Sasuke could put Sasuke in more danger.
Perhaps in the fanfiction, Naruto is tricked into believing his clan is a threat to the village. So, in an attempt to protect Konoha, he takes drastic measures and kills them. It could also be that a powerful and evil entity takes over Naruto's body, and using his strength, murders the clan while Naruto is powerless to stop it from within.
Typically, Naruto is known for his deep love and loyalty towards his friends. Fanfiction that has Naruto hating his friends is probably a deviation from the traditional understanding of the character. It might be used to explore some extreme scenarios, like if he was under some sort of mind control or if there was a huge misunderstanding. But in the mainstream Naruto - themed fanfiction, this is not a common occurrence.