obviously the kids purpose for doing it is 100% of it. Did he do it to play the villain and show how they exist in history? Like dressing up as Che or Mao? That should be fine. If he's doing it to celebrate the Klan, well that's clearly a problem.
Maybe he did intend it to be totally educational, but what about how it may have been perceived by other students? He can control his intent, he cannot control others' perception. Los Angeles is a pretty diverse place, and its very likely that other students of different backgrounds may have been frightened or offended by such a display, especially in the current national environment. Plus, with his face covered, how would they have known that this was someone they knew and that they had nothing to fear? I think this whole thing is inappropriate and should not have happened. Children should definitely learn about the Klan, but this is not the way to teach them.