They still are - the case was narrowly about the Sacrament of Confession, which is a "privileged" communication. If a priest learns of child abuse while teaching Sunday School or running a group counseling session, they would still be required to report as those are not privileged.

Yes but not in this context. If a priest is teaching Sunday school and notices evidence of physical abuse on a child, he is mandated to report. But not if someone confesses to that.