Regarding what's happening, it's a bit of a generous read potentially but I think these lines are pretty clear at stating that it may be happening and the court is concerned that it is happening or that an overeager ruling would endorse it happening.

> Boise said it does not issue citations if the city’s three homeless shelters are full. The plaintiffs said that the two Christian-based shelters have policies to never turn away anyone for lack of space, and so police have continuously enforced the ordinances. > > The 9th Circuit noted that those facilities could still refuse to shelter homeless people who exceed limits of the number of days they can stay or who object to mandatory religious programs.

As to your other point

> I disagree with the notion that religion must be a private matter. Religion is not only a matter of personal belief. Its a framework for organizing communities and raising children. Forcing people to keep religion private amounts to an infringement on "the free exercise thereof."

That's fair, it definitely needs to be a balance, it's my opinion that things like Prosperity Gospel not being outright illegal and pundits like Pat Robertson are good examples that it has gone too far, but I definitely see and understand concerns about going too secular. I'm privately faithful and secular in nature, but that's just me and I understand that other folks have their own understandings of faith and religion.