Is the Freedom of the Church "unnerving"?

At The Immanent Frame, Prof. Robert Yelle writes (in the course of a discussion about the Hobby Lobby case and related matters):

From a societal perspective, there are significant problems associated with granting such rights to corporations. The rise of the notion of an individual freedom of religion was complemented by a diminution of the Church’s corporate authority. At the beginning of the Reformation, William Tyndale translated the term ekklesia in the Greek New Testament as “congregation” rather than “church.” This was rightly perceived as an attack on the power of the Church, conceived as something distinct from a voluntary association of individuals. Thomas Hobbes followed Tyndale’s translation in an effort to demote the authority of the Church’s corpus mysticum, which would otherwise constitute a threat to the sovereignty of the king (or Leviathan). Churches became voluntary associations whose enforcement powers were limited largely to the power of excommunication. Already before the consolidation of the notion of religion as an individual right, the Peace of Westphalia attempted to remove the possibility that intermediary institutions would dispute, on religious grounds, the authority of the sovereign, by making the prince’s religion that of the land (cuius regio, eius religio). The freedoms that churches and certain religious associations have traditionally enjoyed under the law when acting as religious organizations are the result of a process of negotiation, under which the dangers represented—on the one hand, to individual rights, and on the other, to the sovereign authority of the state—have been sharply circumscribed, at least in America, by what Roger Williams and Thomas Jefferson called a “wall of separation.” The idea that we might be retreating from such settlements is, to say the least, unnerving.

More and more, I encounter the term "settlements" being used to describe the successes nation-states have enjoyed at shrinking, constraining, or dissolving the religious freedom appropriately enjoyed by religious communities, groups, institutions, and authorities (i.e., the Freedom of the Church).  It's tempting to declare the status-quo a settlement when one approves of it, but I'm not sure why that label should carry much weight with those  who do not.  Is some movement away from Hobbes, or Lemon-style misunderstandings of church-state separation, or laicite "unnerving," to use Prof. Yelle's term?  Maybe . . . maybe not.