What in God’s name is going on here?

If the parents are going along with this disruptive behavior, then they should be told that the school system is for children, not pets and if they are going to insist that their children be treated as pets then they should go all the way and keep them home. 

This falls into the category of "You have every right to indulge in your delusion but you have zero right to compel me - or anyone else - to join you in it."

Here is the article from the Iowa Standard. https://theiowastandard.com/fur-real-iowa-students-parents-report-kids-wearing-collars-barking-hissing-as-furries/