Clearly the Supreme Court disagrees!
I don't think you're correct, Mark, although it's not your fault for thinking that's what the Supreme Court are deciding.
The BBC article, particularly at the start is actually written extraordinarily badly! They write that the question put forward to the court is "Who is a Jew", and whether "practice" (i.e. religion) or "bloodline" (i.e. race) defines a Jew. That is not actually the case. Everyone agrees those are two possible meanings of being a "Jew". The question is just whether it's racially discriminating to have an acceptance policy to a Jewish school relying on the racial definition of a Jew.
On face value it seems to be discrimination, however the school's argument is that religious practice counts for nothing in Orthodox Judaism, and only your bloodline (or religious conversion) makes you Jewish, so their particular acceptance policy is not racist - if anything it's Orthodox Judaism's view which is racist.