I definitely don't think the teacher was trying to wage an attack on God. Who hasn't had/seen/heard of classmates who sneeze or cough or clear their throats dramatically (or do something similar) to disrupt the class? If this teacher is telling the truth, that's what those students were doing.
Teachers get fed up and do/say dumb stuff all the time. I remember teachers screaming "don't ask me any more questions! No, nobody's going to the bathroom, nobody's getting water, if you don't understand, too bad! Just be quiet!!!" If stuff like that made it to the news out of context, a lottttttt of teachers would be under fire.
I was on the phone w/ my cousin the other day (middle school SS teacher) and she screamed "if you touch me one more time, I'm gonna elbow you in the stomach!!" I told her she needed to be careful. I know she's super cool and her kids love her. She has "that kind" of relationship with them. But all it takes is for one activist student to say something, or one kid to tell their parent (not realizing the implications), and her whole career could be over.
The "God bless you" thing doesn't even have religious implications today. It's a social, cultural tradition that is more of a courtesy than a heart-felt blessing (more often than not).