Sunday school is not a public institution, which is why it gets a pass. Similarly private schools are free to do this all week long.
I think even this supreme Court would rule the correct way. I wouldn't be surprised if it were even unanimous, but at worst I'd expect the 6/3 split with Thomas, Goraych, and Alito. There's only so far they can go when the Constitution was very blatantly clear on this matter.
Perhaps an oversimplification, but I'd say it's the one point that progressives are so pissed that they would tend to forget that the other likely choice would rather see more genocide. On other points I'd say progressives may wish for better, but are willing to be more pragmatic for now.