I agree, it is stupid. Those Catholics obviously haven't been following their own holy text closely because to Christians, rainbows symbolise the promise that God made to never flood the world again in the Old Testament. They can't ban a symbol just because another community uses it for a different reason.
That's absolutely ridiculous. A rainbow is a rainbow - what does it matter that it's also a symbol of pride? Not everyone recognizes it as one and, even if they did, so what? People are proud to be who they are. There's nothing wrong with that. That just puts a bad name towards Catholics everywhere, too.