It should be observed, of course, that no school, vocational or not, is helped by a confusion over its purpose.
The words in bold are where I do not understand. Any kind of help are going to be appreciated, thanks in advance.
The sentence is grammatical and its meaning is not in dispute.
But it lacks concision, and its comprehension would benefit from a bit of reorganisation.
How about: Clearly, no school, vocational or otherwise, benefits from confusion as to its purpose?
Do you really need the It should be observed that, of course...? It adds to the verbosity and doesn't seem to say anything important.