Of course going back to jail after being free would make any kid who values his own autonomy depressed. School in its current form is awful, because it's far too authoritarian and preachy, not because "bullying".
You wouldn't have issues with bullying if you didn't force kids who don't like each other to interact without oversight in the first place. Oversight is key, when you know kids don't like each other, don't put them together again until you know they're cool again. It's hard being a little person.