The school hasn’t overridden anyone’s individual rights to practice religion.
There’s a big difference between one’s beliefs and practices, and demanding space and accommodation within an institutional setting for every desired religious practice.
Protections under the equality act, for example, require “reasonable adjustment”. So reasonable adjustment in accommodating aspects of religion that are essential aspects of the religion is one thing; but a demand to have all religious desires catered for is not necessarily “reasonable”, and not accommodating all desires is not necessarily discriminatory.
For example, many Muslims have said that it is perfectly permitted to make up prayer times missed at school later in the day, especially in the case of children. Some schools or employers might provide a prayer room as a gesture; but they are not discriminating against Muslim students by not doing so, especially when no religious accommodation is offered to any other students. (FWIW, I’m a governor in a large academy trust of secular schools with many Muslim students, and none of our schools provide prayer rooms either. All the usual dietary, clothing, etc. religious requests are allowed; but there are no prayer spaces for any faith.)
That’s normal in lots of secular state schools across the country; conversely, if one set of students are commanding the playground or any other communal school space to pray in groups publicly, isn’t that also a infringing the rights of other students to a secular OR to a multi-faith communal space? And if you provide indoor prayer rooms for up to half the school, then you’d need to be providing the same for every religion. And secular spaces too. Unworkable in a school setting, no?
I think it’s absolutely right that religious belief may require reasonable adjustments under the law. But the key word here is “reasonable”. That’s why the judgement is as it is: the desired “adjustments” were not considered “reasonable”. In the same way that adjustments for every protected characteristic need to be reasonable. It’s reasonable to require disabled access to a building, for example; but not in each and every circumstance (you can’t destroy a listed historic building to install a ramp, for example). I’m sure you can think of many more examples where everyone’s different rights must be negotiated in order that things are fairer for all.