The ACLJ said his actions are unconstitutional. "A student's constitutional free speech rights to express religious views are fully protected by the First and Fourteenth Amendments," the ACLJ wrote.
It sounds like the student was informed well in advance about the criteria for the paper, and chose to ignore them.
If the professor wanted her to write a paper without using the word "refrigerator", he could have done so. If the student intentionally ignored the criteria for the paper, then her grade is understandable. If she met with the teacher and department chair, and the criteria of the paper was firmly established, I don't know what her grounds for complaint are.
With regards to the quote above, she has every right to hold the views that she does...but the professor is under absolutely no obligation to give her a passing grade for them.