If I go to a psychiatrist and admit to a crime, that admission is not protected by doctor-patient privilege. My doctor would be obligated to tell me to turn myself in to law enforcement or, at some point, to report me him/herself.
"Religious freedom" is not absolute. Just as a man who kills someone because "God said to do it" is not protected by the first amendment, neither should be criminals who admit to felonies in confession. But in this case, it wasn't even an admission of guilt that this priest swept under the rug; it was a plea for help from the victim.
First the church failed this young woman. Then the courts did as well.