If the kid were a practicing Catholic, he would have said “Yes, sir” and put the rosary inconspicuously in his pants pocket or backpack. It is to be prayed, not warn as a personal fashion statement.
For me its the threat of the principal to cut it off him that makes it a threat to the individual...not weather or not he is wearing a rosary...many people have them hanging from the mirror in their cars. It could be a reminder to some to say the prayers...