What's amazing here is that an American city outside Utah acquiesced to demands that a piece of public infrastructure be degraded, on the basis of someone's religious objections to women who are not covered. It was a boneheaded decision to enforce values of a single religious group upon the public at large.
Why is it amazing? That's the way the U.S. is set up to work - to strike a balance allowing geographical differences in local community standards to coexist with larger scale government standards. The founders never wanted the entire country to be a homogeneous mass with everything being the same everywhere. They wanted some wider principles and and guidelines for the entire country, but the flexibility for local regions (initially States) to do things differrently they way they wanted. So anything not covered by Federal laws are subject to State laws. Anything not covered by State laws are subject to county ordinances. Anything not covered by county ordinances are subject to city ordinances. Anything not covered by city ordinances are subject to smaller official community organizations (e.g. school boards).
If there are no federal, state, county, or city regulations requiring that bike lanes be present, the local community is free to decide, based on the social standards of the majority of the local residents, whether or not their streets should have bike lanes. If a community is largely comprised of Hasidic Jews who don't want bike lanes, then as long as a higher layer of government doesn't require bike lanes, they are free to do with their community as they wish. That their reason is based on their religion is irrelevant. As long as it doesn't violate a law or ordinance, people can make decisions for their community based on science, religion, Oprah, phase of the moon, or the voices they hear in their head. If someone feels the majority has gone too far and is violating the rights of the minority, they bring it up in court.
This is what allows right-wing communities to have ordinances which they are more comfortable with (e.g. no nudie bars). And allows left-wing communities to have ordinances which they are more comfortable with (e.g. mandatory recycling pickup). The legal environment set up by these local norms live and die based on people voting - both at the ballot and with their feet (moving into or out of the community). Laws at the local level which don't work get filtered out, with a lesson learned not to try it at a higher level. Laws which do work at the local level get noticed as a good idea, and get tried out at a higher level.
