AI's integration into education promises to equip teachers with data-driven insights and intervene in student learning. Despite the intended advancements, there is a lack of understanding of interactions and emerging dynamics in classrooms where various stakeholders including teachers, students, and AI, collaborate. This paper aims to understand how students perceive the implications of AI in Education in terms of classroom collaborative dynamics, especially AI used to observe students and notify teachers to provide targeted help. Using the story completion method, we analyzed narratives from 65 participants, highlighting three challenges: AI decontextualizing of the educational context; AI-teacher cooperation with bias concerns and power disparities; and AI's impact on student behavior that further challenges AI's effectiveness. We argue that for effective and ethical AI-facilitated cooperative education, future AIEd design must factor in the situated nature of implementation. Designers must consider the broader nuances of the education context, impacts on multiple stakeholders, dynamics involving these stakeholders, and the interplay among potential consequences for AI systems and stakeholders. It is crucial to understand the values in the situated context, the capacity and limitations of both AI and humans for effective cooperation, and any implications to the relevant ecosystem.
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