To say this is a new law that prohibits Christmas gifts to teachers is somewhat misleading. This is an update to an existing law that covers all public employees, of which teachers are included.
According to the law, gifts of de minimus value are still acceptable. So homemade cards and goodies, ornaments, boxes of chocolates, mugs, candles, Dollar Tree store items etc are all still acceptable. IMO, it is inappropriate to give a teacher more than that for a gift anyway, so I think the change in this law is reasonable. When I worked as a paraprofessional, I would have felt very uncomfortable, but appreciative, to receive a gift of significant monetary value.
It is very important for public employees to treat all the citizens for whom they work equally. A person paying $20,000 a year in property taxes should receive the same services as a person who pays no property taxes. Perception is reality. While a teacher may not take a gift as a bribe, it can cause problems if someone perceives that a child is getting special treatment because the teacher has received valuable gifts from that child.
The schools should have already informed the parents of what is acceptable for teachers gifts in order to avoid any awkwardness in the classroom. Hopefully the schools can come up with a reasonable policy of how teachers are to handle inappropriate gifts, such as turning any such gifts over to the principal who will then contact and return the gift to the parents.