I'm so sorry about everything you are going through.
Unfortunately, I think they are required to test her. I once called animal control about a semi-feral cat I was caring for; I didn't want to give her up, but my ex-boyfriend's mom wanted information, b/c she had scratched her, me, and my ex. I wanted to quarantine her at home (I'd been doing animal rescue long enough at the time to know I could). They basically gave us no option after we told them-it was quarantine her at the pound or at the vet. Well, the vet would have cost a lot. The only other choice was to claim she was lost. I couldn't bring myself to lie to them. I should have gone with the vet or said she left and done it at home. She ended up with a nasty URI that nearly killed her and took several months and about $700 from my pocket to get over. The pound said they were not responsible for the health of animals that are quarantined, though they did send her home with medication originally (it didn't help much, but they tried).
I think when it comes to laws about rabies, there isn't much compromise. That said, the way they told you is horrible. They should have told you up front, for one, and two, why tell you the details unless you want them?? It's very insenstive. I'm very sorry that you are having to deal with all of this.
