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Folau has continued his social media campaign against same-sex marriage, the latest including a link to an anti-gay sermon by an evangelist.
And it has drawn Wallaby legend George Gregan to tell Folau it is time to shut up. But it seems Folau will be free to carry on.
Castle, a former New Zealand Netball and Canterbury Bulldogs league CEO, said: "This is singularly the most difficult thing I've ever had to deal with."
She told the Fox Sports Kick and Chase Folau was "walking the line" because team mates were constantly having to deal with enquiries about his beliefs.
Castle said she has spoken to Folau again this week, but Rugby Australia has refrained from taking action against Folau despite the reaction from fans, players and sponsors.
"There's no black and white answer," Castle said.
"On the one hand you're dealing with a human rights issue. On the other hand, you're dealing with freedom of speech and someone's right to express their views, whether it be religious or otherwise.
"I think the test continues to be whether that's done in a respectful way, so that's the measure that we'll continue to apply.
"It's a very hot topic in the Australian landscape at the moment. The freedom of speech movement is looking for a conversation to be had and that's why - and I keep repeating myself - it's very delicate and we're trying to manage both sides so everyone feels included."
Gregan said: "As soon as you bring it on the social media platform, it becomes a huge, huge point of discussion about the game, not necessarily for the right reasons and not representative of the people in the game of rugby.
"That's my concern with this. Let's talk football. These beliefs that you talk about, keep them to yourself.
"I don't see there's a need to be putting it on a huge social platform because it takes away from what he is - a great rugby player."