As I see it, the problem with the app is not only that kids lose points for bathroom breaks. That's just the most outragous part, but it distracts from the core of the problem.
The problem is how this app is designed to enforce absolute discipline and completely disregards the students need for privacy.
Can you imagine how terrible it would be if you had a bad day, were a bit distracted in school, got yelled at by the teacher, only to have your mom text you to tell you off for not behaving in school?
The app would be just as bad without the bathroom break part.
As developers / product designers we can't always hide behind our users, by claiming that we can't influence how they use our products. Some products simply encourage bad behaviour, and we should take at least some responsibility for what people do with them.