If I were a witness, I’d probably say the professor was being counterproductive and the school was justified. Simply put, she is not fulfilling the schools goals for the course, and is straying from those goals so far that she needed to be removed immediately. What ‘academic freedom’ has to do with this I have no idea, as she’s not a professor of Education.
Now, on a positive note: I have found an early failing mark very helpful, however grading should be such that a student who fails a first exam still can get an A. And exams, especially timed ones, should be easier than the homework. I have no idea what instructors are thinking when they make timed exams harder than homework. If you want to push a student’s bounds, do it in homework, in the process making the stuff you put on tests easier for them to handle.