Whats a teacher to do?

I had a very interesting situation occur today when I was observing and helping out for my practicum 1 hours. As I have mentioned in previous posts, my school environment is extremely structured and their is a rule for everything. The students are expected to use the bathroom before school, during lunch, after school and on their assigned bathroom brake with no exceptions(unless an emergency.) Each grade level does get a scheduled time each day to use the bathroom.
I was helping the third grade teacher with a math lesson and a child asked to go to the bathroom. My teacher is new and she used to let them go but things go out of hand because once one goes they all need to go. So now she follows the schools rule and just tells the students they have to wait. I told the child no but she kept asking so I sent her over to talk to the teacher, who also said it was almost lunchtime and to wait.
About twenty minutes later the child raised her hand and the teacher said just a few more minutes until lunch. The child responded back to the teacher that she has already went. Everyone was in shock as the embarrassed student rain to the bathroom as we rushed to find her a change of clothes and clean up any evidence. So was the teacher wrong, the school wrong? Now she lets everyone go when they ask and now the students ask nonstop and things are out of control. I am glad that I am not in her situation because I am not sure what I would do.