My understanding is that the teacher was made to apologise to the whole class in front of a senior teacher (the Head or HoD). How humiliating. How was she realistically going to retain any authority after that. The pupils would see how easy it was to bring her down. A contract being renewed is not the same as being sacked, but I read that she had expected it to be renewed, so presumably had made plans based on that expectation. Even if that is not the case, I don’t think it is unreasonable for a staff member to expect support from her manager, at least in public.
I don’t know what I think about self-identifying trans children in single sex schools. I don’t think that so-called ‘gender’ should have any bearing on education or how children are treated - in fact I don’t think that behaviours are sex-specific anyway, and teachers shouldn’t be buying into an ideology that suggests that they are, and/or that changing sex is possible. OTOH, I’m inclined to think that it would have been best ignored - the publicity is likely to make it more difficult for the child concerned to change back to being known as the girl she was born as, and it could mess up her life too if she had to go to a boys’ school.
If the teacher had been a permanent member of staff the outcome of the Forstater case would have given her some protection, I believe; which suggests that temporary staff are in need of protection from discrimination too.