The first questions that sprang to my mind -
Malaysia's State religion is Islam, but only 60% of the population are Muslims (in 2010, anyway). Was the guy who had to carry the dog actually a Muslim? If he was, why didn't he object? How many of the athletes led out by the dog were Muslims, and did any of them object?
Yes, I'd agree that this is the kind of issue that could be avoided*, but then there does come a point where you can't have any 'traditional' Scottish stuff on show - Shortbread is offensive to vegans, and those who are Gluten-intolerant. Tartan is offensive to the Colour-blind. Thistles are offensive to gardeners. and so on...
* I work in a Uni, and generally at Registration we offer sweets to the students who are standing in line waiting. One year Registration and Ramadan coincided, and after a few embarrassing encounters (we get a LOT of Muslin students) the decision was taken to stop giving out sweets. Nobody actually complained, and the Muslims who were offered sweets were generally good natured about it as it was obviously an honest mistake rather than a deliberate attempt to be mean (many took a sweet to eat after sunset). The next year, our registration team checked if the dates overlapped (they did) and we had no sweets at all. The year after, no overlap, sweets all round.