I doubt not being able to contribute to the Linux kernel will affect their CS department's rankings. Maybe it'll affect their reputation in the short term.

The teaching hasn't changed, and the CS field is a very large space, and the Linux kernel is a prominent but small part. That's not to say the Linux kernel is insignificant, just that the CS field is very big.

Personally, I see this as a group of researchers going about it outside well-understood ethical patterns for pentesting and getting punished for it. I think it's necessary for the university to be made an example of, but I don't think it necessarily reflects badly on the whole CS department. Hopefully the IRB does a postmortem of this and concludes that ethical review also needs to field-specialist input in general.