That's the confusion, the "endorsement of religion."
I think (and I don't know but I assume it's been debated by others who are smarter than me), that "respecting an establishment of religion" does NOT mean the concept of "religion." I think "establishment" means a specific denomination of church, not the verb "to create."
So, "respecting an establishment of religion" means respecting, say, Methodists over Protestants, not the general concept of "religion, " which a single non-denominational cross in a cemetery represents.
The cross itself is not an establishment of any one religion.
-PJ
“Respecting”, in that context, means “in regards to” or “with respect to”.