Take the easy way with people who are over thinking this, tell the child to use the German expression in response to a sneeze, gesundheit!  It's used in many countries who don't even usually speak German. 

Sigh… ok, I am going to wade into this with my opinion.  I am personally nonreligious. My family attended Congregational church and I attended church and Sunday school throughout my youth.  For whatever reason, I guess the vaccination never took because for whatever reason I just never believed.  I am not an atheist. I am not agnostic. I am Bob.  Let's leave it at that. 

I am neither for nor against those that hold religious beliefs. My view is that each and every religious group has a common belief in some supreme being. The name/names may be different, but when you boil it all down the underlying concept is the same.  What you need to make you life work is something I have no business meddling with. So if I sneeze, feel free to say God, or Allah, or Ganesh, or Thor bless you.  I understand what you are saying and thank you.

That teacher would have served us all better if he or she had simply said nothing.  I personally have had my fill of hypersensitivity and micro-examining every phrase that is uttered today lest someone might find some way to be offended.  Don't we have something better to do?  Anyway, I am going to go and quickly jump into my bunker now and wait for incoming.