Do you have any idea the amount of drama that goes on at the upper levels of churches? Accusations fly, people entrench themselves trying to find any way they can to hold on to their positions, and these spaces can become some of the most uncomfortable places in the world when you have one person threatening to tear down the entire church with a legal threat. Then absolutely no one talks about it outside of rumours and that work area.
This woman is in the right, but this precedent will cause bloodshed.
Why does that apply any more to churches than other organizations? And is giving churches blanket immunity to any kind of employment law (which they can apparently easily extend to cover almost completely nonreligious teachers) really the way to prevent this "bloodshed"?
Well, think of it like this. They either believe that what their religion teaches is true, or it isn't. If they do believe it is true, then they have a moral responsibility to ensure that the children involved are raised correctly.
For you people out there looking for a practical reason why this is useful, if they teach something at all contrary to the religious beliefs of the organisation backing the school, you can then sue them for endangering the child's immortal soul. They were either negligent or deliberately teaching what they believe is wrong, and they believe that at stake is the child's immortal soul, so that should be worth at least a moderate sum of money.
If they believe that what they are teaching isn't true, you can then sue them for not teaching what you have sent the child there to be taught, and thus sue them for negligence. Either way, you win.