Thanks to everyone who made suggestions. Especially MTO and no-comment.

In the end the following code worked:

def substring_sieve(data):
    prev, *remaining = sorted(data)
    output = [prev]
    for value in remaining:
        value = value.rstrip('/') + '/'
        if not value.startswith(prev):
            output.append(value)
            prev = value
    return output

This handles edge cases where there is a duplicate entry in the input list, and where one of the paths is a substring of another. For example: ['/home/greatlon/test_site2', '/home/greatlon/test_site']

Thanks again all!