Yes, if you added batteries, some additional circuitry, a detonator, and explosives, you could convert it to a bomb. I could also convert your digital watch or cellphone to a bomb if I added the same ingredients.
Should we call the police because you have a digital watch or a cellphone? Clearly not. The police should not have been called in this case either. The teacher should have told Ahmed to put his dumb toy away until after school, and that would be that.
Frankly, if you put it in a suitcase with room enough for C4 and a detonator like the example of this child's experiment, and take it to a school, yes.
Secondly, the driver circuitry for the detonator is probably already there in the alarm output that drives the buzzer.