Why not? I think it obviously does. Assuming that children judge people on their facial features, at least one of the following must be true: A) Facial features determine, or indicate the person's personality and competence. B) The children are mentally ill. Since A) is false, B) must be true.
The study is about character traits, not disabilities, and I suppose you wouldn't know much if you were treated as retarded your whole life, regardless of your actual IQ.