Of course it's a nonsense question, and the kid didn't have to answer it, just like any other test question. If kids got suspended for failing to answer test questions, there'd be a lot more home schooling, of the involuntary kind. OTOH, there is a built-in punishment for not answering test questions; getting a bad grade. It should have been left at that. Typical zero-tolerance crap.
The problem is that this is a standardized test, and the scores will reflect on the school.