People don't usually interpret egg free as being nothing containing eggs. My sons preschool is egg,nut and seed free and they don't ban baking. I don't know why now I think about it.

The counting on fingers thing seems to be standard. The are taught it when the start formal learning. My son took 6 months to get back to where he was before he started. I have read similar complaints in other forums (and this one I think).