I assume that the school passing him along as a fit candidate for work as an FO despite his illness will be the main issue,
Somethine ATCA didn't do, and couldn't do. The final part of the training, including the practical ME flying, is done in Germany with Lufthansa Flight Training, not ATCA in Arizona. ATCA is just a contractor (although wholly owned by lufthansa flight training), that is contracted to do some parts of the initial flight training.
It will be interesting to see if ATCA had any information about the medical status of Lubitz beyond him having an unrestricted FAA class 3 medical, or if it didn't. There should be a papertrail if they did, but it is not a sure thing at all.
It's an impossible question to answer, but how would the FAA have reacted to the renewal of Lubitz' Third Class, and would they ever have agreed to him getting a First Class, given his medical history? As it was, he went through the American flight medical certification process just once, and at the lowest level possible.
And it is completely irrelevant in this case. He never applied for a higher medical class, he never needed to do that and why would he? Getting the FAA class 3 medical is the normal case for this type of flight training, and there is no reason to get more (and pay more) if one plans to work in europe as a pilot.