Federal law bans employment discrimination on the basis of race. And courts have interpreted that to mean discrimination based on skin color and other “immutable traits.”
The key phrase in this ruling. Immutable traits. Hair is not an immutable characteristic.
Ideally, dreads wouldn't be the only hairstyle targeted. If someone wore a mullet or a Mohawk to work, you could make the same argument.
I'm just as skeptical of the reasoning that dreads "get messy" and such things are definitely couched in ignorance but extend this idea further that an employer can't request a hairstyle be changed which is something that you don't have to have. Someone who wears a Mohawk to the office can claim the same bias against a hairstyle they chose to have.
Emotionally, I understand the disagreement but based on how they are interpreting law, it sounds reasonable to me.