"Boycott" is the wrong word here. The students certainly organized themselves, but they were not boycotting -- they were taking advantage of a grading policy that creates an optimal strategy for the students if they work together and cooperate.
What these students learned by working together like this is almost certainly more important to their intellectual growth than the exam itself. The professor for the class seems to recognize that, which is also a good thing.
It seems that they were preventing other students from going in as well (at least that was the implication with the guarding of doors). So perhaps they actually learned to get what you want through coercion.
That, in my opinion, tarnished their achievement. I agree with the sentiment of what was done, but the execution was poor. It would of being a far greater achievement if they didn't enforce the choice.
I think it's an appropriate usage of the term. It's an organized effort to abstain from some specific activity, which is a broad but well-understood definition for "boycott." Nations choosing to not send competitors to the Olympics, for example, is widely called a boycott despite it not having anything to do with purchasing a product or service.
The semantic objection is not because of "purchasing" implications, but the intent behind the abstention. Nations boycott the Olympics for political reasons. The term boycott implies collective abstention to influence something outside of the standard transaction. In this case, the intent behind their abstention is inside the standard transaction: they abstained to get good grades.
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In high school I had a physics professor who had this exact policy, except that he never imagined the consequences of everybody NOT taking the test. I did, and with the help of a friend we tried to organize the 'boycott'. It failed horribly, but at least we tried. Great story OP!
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What these students learned by working together like this is almost certainly more important to their intellectual growth than the exam itself. The professor for the class seems to recognize that, which is also a good thing.