TLES, points have been made here that I think you could do well to ponder.
You knew your son had had a haircut last night, you had not seen it, the school phoned to say the haircut was inappropriate and he was being sent home. In these circumstances, I would have thought "what HAS bil done to his hair?". But you thought the school were being arses. Why? Why did you not think that his haircut may have made the style cross the line from just-acceptable-at-a push (a mohican aged 11?) to not-allowed? Not having a go at you, just pointing out that you made an unconscious choice of who to side with before you'd even seen the haircut.
The school has said he can come back and work in the TORR, which you accept. As has been pointed out, this could have a long-standing effect on how he is perceived by his peers, how they will react to him, how he sees himself. Would going back to the classroom after being in TORR involve ?losing face?? Could it encourage him, albeit subconsciously, to act up at school more? In short, do you really think it is a good idea that he go back to school with the Mohican on this basis? Would it not be better to insist on the haircut (get bil to do it again) and get him into the classroom.
A haircut may seem minor on the face of it, but as has been said many times, you are teaching him to kick-up and get his own way. I would say you are making a rod for your own back, but you know you made that rod a long time ago, you are working to get rid of it, you need to remain consistent and you need to get rid of the Mohican. If not, I would keep him off school on Sports Day, he does not get that treat.