Catholic teaching is that parents are primary educators of their kids. In an above post I mentioned that the church normally doesn't baptize kids if the parents don't agree to raise the child in the church.
It's the same situation here. When you are flaunting your disregard for a teaching of the church, how can you then agree that you will abide by its teachings when teaching your child?
No, the school IS punishing the child, that's obvious, it's reasonable to say that it's the lesser of two evils, that it's WORTH IT to protect the other kids, but let's not pretend the kid isn't being penalized because of the sins of their parents, because clearly, they are.
I'd say the kids need to grow up. Like it or not, homosexuality exists, and you have to deal with it. Likewise, the kid who grows up in such an environment is in need of good religious instruction, and it seems to defy the mission of the church to deny them that.