Eh, I imagine the Vatican doesn't mind since Mexico is quite profitable for them anyway. And it's not like the Pope can't make public appearances wearing his usual Pope clothes and stuff.
Plus it's hardly 100% enforced - I think it's good since it can prevent schools (that in Mexico MUST be secular, at least public schools) from having religious events forced on students, for example.
It's not 100% enforced, but it's still the law, and that's no good. And if having religious events forced on students is a problem, make that illegal. There's no need to forbid clergy from wearing religious clothes in public. It just seems weird.