I'm running OneNote add-in that use OneNote REST APIs.
While investigating an issue from one of our user, I found the class notebook data from REST API only have one student in students field but the user said that there are more in OneNote app.
So, here is data from REST API. And I asked their class notebook manage screen and there is only one - But they see lists in OneNote app.
Is this something different type of notebook?
The response indicates that single student entry is a group (see 'principalType'), while the teachers are of type 'Person'. It looks like the students were added as a group, which is why you only see that group in the API response and in the Add/Remove students screen. That group was expanded into its individual students when the notebook was created. The teacher will see the students in the OneNote client, but only the group in the Class Notebook Creator app.
You can use the Azure AD APIs to get the list of students who are part of that group.
By the way, the API response and screenshots you included contain some personal information that you may want to remove :)