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If mediation does not work and does not lead to reconciliation - the point Sr Mary makes is vital - we treat the 'offender' (either one of the original two, or both) with the respect and love (which should be) shown to those not yet converted. The key is forgiveness (70x7 - whose counting?) - and made explicit in the following few verses. What you bind on earth will be bound in heaven. If we do not forgive we bind ourselves - not the 'other' [.. how often these words of Jesus are taken out of context and abused as a weapon in 'power' relations - a mis-application of the 'authority' Jesus gives to us, his Church]. 
Jesus is in our midst and helping us to obey his eucharistic command 'do this (forgive) in remembrance of me'; this what he demonstrated at Calvary, and what he continues to demonstrate. Can we agree to forgive? Sadly we prefer to insist that 'I am right, you are wrong'. So what good is that, if cannot love one another sufficiently to forgive and move on? Like Jesus