I find the teacher disingenuous. I suspect what "interfered with her ability to teach" was her own personal arousal at a lesbian. Of course, she isn't likely to sat THAT.
So, absent her being a complete idiot and saying that was what the problem was, I imagine that the student will not be wearing that shirt to class there anymore.
Sad, but true, that one person's displeasure with another's orientation when the displeased one is in a 'power-over' position in a school will normally mean that the one with less power will toe-the-line.
Nichole