I think if they are going to allow discrimination for "religious" reasons, then I think then the whole issue is gone to dust. I should be able to discriminate against your religion then as well, because I am not religious.
The idea is that the government can't compel someone to endorse a particular message. This includes the commission of creative works that someone disagrees with. This is NOT a general right to refuse service based on protected characteristics.
So you can't make a Jewish baker bake holocaust cakes if they don't want to (yes, this is an actual example that came up). But if someone is already selling holocaust cakes, they have to sell them to everyone regardless of race or sexuality.