I don't think this makes the MOD look bad at all, as the judgment says they "unintentionally created a situation..." I think we have a situation where the MOD has done what it thought was best, removing the officer from a remote base back to the UK but "unintentionally" got it wrong as it affected her promotion opportunities...
If this was a case of the MOD being outright in the wrong the damages would have been a dam sight bigger that 16K!
I think the judgement is correct when it says that each case should be assessed on it's merits, I couldn't see this judgement being made if said officer had been in Afghanistan as removing her from the war-zone would be proportional... no employer will get it right, and with the MOD's glacial rate of change it's nice to see that they are at least heading in the right direction and trying!
As a side note: if the MOD hadn't stationed her with her husband I wonder of this situation could have been avoided.