I suppose if Australia is a knifing culture and wants knives for everyone, maybe they repeal it for everyone?
No, we don't have a knife culture. We have very strict anti-knife laws. This is a circumstance where the specific exemption allowed for religions around knives clashed with the more general knife ban in schools.
In general society, there is a knife ban, but Sikhs are effectively exempt in terms of the kirpan.
In schools, it was less clear. Until recently, the kirpan had been allowed, but one was used in a stabbing, leading to schools banning them. This case was to establish whether the existing religious exemption rule, or the existing school ban took precedence.
The religious exemption won out. I'm not a fan of a general exemption, I think it would have made more sense to work with Sikh leaders to find out what could be done in a school setting to satisfy safety rules and the religious requirements. Sometimes that isn't possible, but in this specific case I think it would have been simple, based on my admittedly limited knowledge.
There had been suggestions from Sikh communities on various means of securing kirpans, or similar, so as to render them impotent as a weapon.