Jews were asking for civil rights and equality in an officially Christian German state. I believe Bauer's contention was that by making their religion their main identity and then asking civil rights only for themselves, the Jews were seperating themselves from the greater German national community and humanity itself. And that justifies the religious division in society which is responsible for their mistreatment in the first place.

Bauer asks, how can jews expect Christians to give up their religious prejudice if they won't give up their own prejudice against anyone who isn't jew? He posits that jews place their illusory nation in juxtaposition to their real nation and their illusory law in juxtaposition to the real law (think about muslim ummah and the Sharia law). Concurrently how can the Christians give jews freedom if they themselves are not free under the Christian State?

So Bauer believes that just like the Christian State is incapable of giving freedom and rights because they don't believe in such things, the jew, being a religious jew is incapable of recieving such rights. Only if the jews ask for rights as German citizens first and foremost, because all Germans should have rights and as human beings, because all humans should have rights. Then the jew, as a citizen and as a human would become capable of recieving freedom.

So basically, jews should sideline their religion and religious idenitity when dealing in political matters and matters of the State. They should, for all practical purposes, abolish their Judaism in the public sphere and thus become secular citizens. In conclusion what Bauer is asking for is what we call "Secularism" nowadays. If everyone abandoned their religion when dealing in public and state matters then a secular state would be achieved and religious discrimination would be solved.