And that fact does not give license to the government to muck around and stick their noses into the Yeshivos and order them to change their religious practices.
Well, that’s something that I don’t know about. In the US, of course, such an attitude wouldn’t fly — you take the government’s money, you play by their rules (and, of course, there are even some rules you have to play by regardless of whether you don’t take the government’s money or not).
I don’t know the legal intricacies (do you?) of what rights the government in Israel has to dictate education policy for schools that they fund. It may be as you say (that they have no rights at all), but I would be highly surprised to find that that’s actually the case in law.
The Wolf