It seems pretty clear to me that it's not unconstitutional according to a plain reading of the letter of the law, but the ACLU will argue that it is according to precedent.
Essentially
this:
As you can probably see, this sort of argument is contingent upon assessing the intent of the law, and has the potential for, and has arguably resulted in, legislating from the bench. It is arguably applied when judges
feel it is justified. Now I would say that the government is not offering contracts just to be able to take them away from those who boycott, but you never know how a judge will interpret it with all the weird quirks of legal language involved.
It was already sort of tested with a similar law in Kansas. Like with the Trump travel ban that eventually went through in some form, the judge instituted a temporary injunction. So the Kansas legislature attempted to remove ambiguity from it by removing the restriction from sole proprietorships and companies which make less than $100,000 annually. The ACLU subsequently withdrew their lawsuit and claimed victory, while continuing argue out of court that the law is unconstitutional. That suggests to me they don't think they can really win against the watered down version.
Of course in reality the law was never actually going to apply to this woman in any real way. As far as I understand, she's a speech pathologist that works with Arab speaking kids. What was she going to refuse to help an Arab Israeli kid if he or she ended up at the school? I doubt that.
The public discussion should really be about the underlying principle of it rather than the specific political cause. If applied consistently, a lot of people won't like the result either way it goes.