*Any* line-drawing, not only between denominations but between eligions, requires some degree of governmental entanglement in theology, which some (wrongly, imo) see as contrary to the establishment clause.
The only way to make a list like this is to get entangled in theology. For example, the decision to group mainliners & evangelicals together (PCUSA & PCA) while maintaining the distinction b/w Lutheranism & Presbyterianism, represents very highly contestable theological judgments.
The government is saying one set of theological issues matter but not another. But the PCUSA & the ECLA are in full communion, whereas the PCUSA & PCA are not & do not even recognize one another’s ordination, which matters for chaplaincy!
Some degree of government entanglement in theological contests is inevitable. But that entanglement can be more or less principled & evenhanded & *that* is what the EC can most reasonably be taken to require.
The upshot is that categorizing Mormons as a distinct group from Christians is not *in itself* any more problematic with respect the establishment clause than any other decision on the list. The question becomes ‘Does this reflect a principled, reasonable, evenhanded theological judgment consistent with the others on the list?’ For my part, while I think LDS is clearly not a Christian church or denomination, it does seem inconsistent not to include them while including other non-Christian sects on the ‘Christian’ list.