I think the court ruled correctly - but Reuters as usual gets some of the dtails wrong.
First, the ACLU's position (not that I approve of all ACLU, or even this one) was not based on religious freedom, but that the state has been known to issue pictureless licenses in special circumstances so why not in this case?
Secondly, "Islamic scholars differ widely on the religious requirement of veiling for women, as well as the extent of what the faithful call 'modest dress.' As a result, practice among Muslims varies widely." True - except for driver's licenses: Saudi Arabia does not allow women to drive, so it is (legally) moot: all Islamic nations which do allow women to drive require an unveiled face for the photo.
Florida did something right!
A religious objection that is not based on the actual religion is not a special case. As you noted on the comment about the Islamic nations that allow women to drive.