Since Princess Agatha was excommunicated from the Catholic Church, I would presume the children were brought up in their Father's Faith.
You're probably right, since by the time of the marriage, the Vatican had tightened the clamp on interfaith unions. For like I said, Grace Kelly's maternal grandmother was a Catholic who does not appear to have been excommunicated by the Church, for allowing her children (including her daughter) to be brought up as Lutherans.
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