I am reminded of the author/barrister John Mortimer of "Rumpole of the Bailey" fame. He had the job of defending obscenity cases in the late 60s early 70s. (How out of date they seem now with internet porn). Now the law stated that the publication had to "deprave or corrupt". So you would have the ridiculous situation where some like Rev John Shepard. The Bishop of Liverpool stands up in open court and says "Yes I was depraved and corrupted by viewing this porno".
The complaining student was given a fair warning about the content of the lecture. They chose to attend regardless. The painting was made by Muslims for Muslims in an age when such things weren't forbidden to some Muslims. (it is still just a minority of Muslims that ban such depictions. So it cannot be called anti-Muslim) Moreover, a university should be in the business of questioning your preconceived ideas. If it is just an echo chamber then you deserve your money back.

There is quite a bit of Islamic art that includes Muhammad. It has become the fuckwad members, equivalent to Christian evangelicals, who have taken command of large swaths of the religion and, like evangelicals, work toward the stupidfication of their populace. There are even Muslim scholars who have and di argue that the Koran has been altered over time (a key tenet denial to those who would kill over that idea - Satanic Verses centers on that).
My guess is that the college will want to settle, as they carry insurance for such suits. I hope she drags them and insists on much more.
( nothing to do with this - I had a part in what turned into a law suit against a high school for the actions of a college counselor - sex with a student. The suit wasn't settled for almost 8 years. School immediately offered a million, insurance money, but the parents wanted the school to suffer. In the end, a little over 2 million was settled upon).