Upgraded school system to 2.5.latest. Teachers cannot edit settings in their courses.
Testing method:
Make category. Hide.
Add class to that category.
Add teacher in teacher role to that class.
Enroll teacher in class.
Try to change settings.

Once you do this, you will receive:
Category not known!
on the results page. The error page gives no help:
http://docs.moodle.org/25/en/error/moodle/unknowcategory

By comparison:
1.9 will allow you to do this, even if the teacher is not enrolled.
2.4 will allow you to do this, if the teacher is enrolled.

Thanks very much!