That's because there wasn't much of a papal army until later on. Until the 1300 they were a pretty independant part of the HRE, after that there was an independant papal realm. So at the start of the game the Papal States are part of the HRE, but for gameplay reasons they have to be independant, thus you can give them whatever army seems sensible, as it is the papacy a few religous fanatics seems appropiate.