I never judged the priest. Priests don't dictate what family members are buried together - the family does.
So what I think happened is that the "buried together" idea was immediately and emphatically treated as a matter of course by a horrified and reeling family member or members.
And the rest went along with it, cos nobody knew the details of what had happened and it was a knee jerk reaction. And the priest considered it his duty to support them in whatever they decided.
Remember the funeral was within a few days. I very much doubt any member of either family (or the priest) knew more than the bare bones of it I.e. that they weren't shot, but stabbed. I suspect none had seen the note or knew the contents at that point as it was in Garda custody.
It was only after the burial that details started to leak out, about hatchets, and defensive wounds etc.
I wouldn't be surprised if the priest had deep regrets, as Clodaghs family do. They were operating in the dark and were on a time scale far too short.