We will read Leviticus 26:1 again, without the extraneous matter, and we will see what God meant with this second commandment. It is very simple.
She got turned around because, in Exodus 20, verse 4 is separate from verse 5. This must be, I think, the way it was because verse 4 says that you shall not make unto yourselves any graven image of any likeness of anything that is in heaven above, or the earth beneath, or the waters under the earth - semicolon. Verse 5 says, you shall not bow down to them nor serve them; for I, the LORD your God, am a jealous God, etc.
She got spooked by the incremental number change of the verses. But it goes right on through. As a matter of fact, the Hebrew is constructed such that every part of that commandment is supposed to be read straight through. And the intent is that each of the verbs be added to the previous one. So we are not to carve an image - and - we are not to bow down and worship it! These ideas are linked together in this command, the intent of which forbids anyone from carving an image with the aim of bowing down in worship to it. Simple!
The basic understanding of the second commandment is that we are not to use our imaginations and skill in an attempt to depict God in any way - as it would either be a lie or, at the very least, terribly inadequate. Nor are we to create an idolatrous image of anything else to worship. We are to understand both things: We are not supposed to make an image of what we conceive of God (As in the incident of the golden calf, where Israel made an image of a bull to represent God.) Nor are we to do as the pagans and come up with something of our own creative devising and worship it as a god. But God does not forbid artistic representations of people, plants, animals, mountains, sunsets, stars, planets, galaxies, or whatever. It is only as they are used in an act of worship.
As a summary, this command deals with the way in which we worship. God will not be worshipped with man-made objects. That is not how He has set things up. He wants to be worshipped, in spirit and in truth (John 4:24), not through an idol or some sort of icon or representation of Himself. It is not the way He wants to do it - and so He forbids idols or icons of any form or shape. He wants to be worshipped as we are commanded - and we cannot humanly represent God's form. Any other way, He says, is idolatry. But images used otherwise, likenesses otherwise created and appreciated, are perfectly fine!
