His main problem with religions is that thay are at odds with each other; he doesn't like that the gods are using religions ideas to bring Humanity into their conflicts, he really doesn't like when people harm each other in the name of their gods. If a civ had true religious tolerance, it would be unable to do these things. It would also have to tolerate irriligious attitudes, as well as the views of those who will worship only The One. Perhaps the individuals of the each religion might be pawns in the gods' little game, but the government is refusing to play along.
I don't recomend Cassiel adopting free religion, but he should certainly prefer it to theocracy.
I'm thinking that while it could allow the religious specific civics, it could prohibit the building of disciple units,or at least the religions various holy warriors (Soilder of Kilmorph, The Drown, Crusader,ect).