Under the Family Education Rights and Privacy Act (FERPA), "education records" are records maintained by schools or education agencies about current and former students. When students do work in the context of a school, that work is considered part of their education record. Schools, not students, have a right to students' education records and are the ones that have the authority to modify and delete education records.
If a student on Code.org is inside a teacher's section, we view their work on Code.org courses as part of their education records. That's why students do not have the ability to delete their own account if they are in a teacher's section - they don't have control over their data, their school does. If a student is no longer part of a teacher's section, we have no way of knowing that they are using the service in the context of a school. So when a teacher removes their student from their section, they are effectively "releasing" the education records to the student as now the student will have full control over their account (including the ability to delete their account).
If a teacher deletes their own account, we pop up a dialog to let help them understand and confirm that this will also delete or release their students’ records. If they choose to continue, then any of their students (who do not have a personal login) will also be deleted. This means their students’ education records will also get deleted, which might not be something the school intends to do. If a student does have a personal login, then the student account will not be deleted but the student will end up getting full control of their account as they will no longer be inside a teacher's section.
It is okay to release or delete the education records of your students as long as your school no longer has a need for them. If you are simply removing your students in order to delete sections and clean up your list, we recommend archiving your sections instead, which you can do without removing your students.