They could argue it was over the displaying of “political” symbology, and not for the perceived sexuality of the employees.

They could, but the article quotes text messages from the lawsuit that very strongly indicate it was explicitly about perceived ‘gay pride’ being the kind of “political” they don’t want:

On June 22, Splitter, a temporary summer library employee, complained about the display to Lancaster, saying she found the “gay Pride” symbol offensive and going into “an anti-LGBT diatribe” even though Lancaster explained that the infinity symbol represented neurodiversity and autism.

Splitter then complained about the display to Michelle Miller, vice chair of the library board. Miller reportedly told Lancaster that she could get her fellow board members to have Lancaster take down the display.

“I am totally fine with diversity of skin color display, just not represented with rainbow colors,” Miller texted Wheeler, the director, according to the lawsuit. “I do not want any kind of rainbow display especially in this month. We have a conservative town and as a library do not need to make political statements (see Target and Budlight as negative examples). I certainly do not want the library to promote LGBTQ agendas.”

From context, not only did the plaintiffs explain that the rainbow-infinity is an autism symbol, they also went so far as to take down the display to seek guidance on how to change it- and even after those accommodations they were fired. But at least they put their intent to discriminate in text messages that would be discoverable at trial