Why? As long as she keeps the two strictly seperated there's no problem imo. I'd have a bigger problem with a former soldier teaching.
I could see your point albeit a non pc perspective.
I think however, the biggest difference is with the circumstances of what someone's present day activities are.
For how ever much stock you put into it...most people are just inclined to try as best they can to protect the sexual innocence of their children more than anything. To that end they see person's off hours activities who works around their kids as relevant. Not to the point of controlling their personal lives but the would be a fool to ignore apparent stuff.
I don't have a problem necessarily with a suspension in lieu of finding out the facts (i.e. did she somehow direct students in some way to her personal business, etc.) in this case. Where I do have a problem is when some people find out what a person used to do...as in stripper, prostitute or whatever..then suspending or firing them.
That's stupid IMO.