How old is she?
Does she do it at home? Does she peel or rip other things?
It's probably a behavioral thing because it's not her property (assuming the teacher or school is providing the crayons) and she's been asked to stop, and hasn't. That's a bit problematic, but I don't think she needs to be put in therapy or anything.
Has anyone asked her? Maybe she doesn't like the feel of the paper, or she prefers the feel of the smooth crayon better, or the way it looks better.
If the crayons belong to the teacher, and the teacher doesn't want her to rip the paper off, then she is going to have to learn about respecting other people's things. Can you get her a small box of crayons at home and watch to see what she does? If she starts to pull the paper off, and you stop her, how does she react?
If it's a sensory issue about how it feels, and the paper feels terrible to her, she just may not use them, or she might get upset. There are lots of ways this can go.
Hi. More information would be helpful. What grade is he in? Tearing paper can be a form of fidgeting. That's something that some kids do to stay focused or self soothe. Is there any other feedback about your grandson? I assume that they have asked him not to do it since they are terming it a behavioral issue. When you talk to your grandson about it, what does he say? My son has always torn paper into tiny little pieces. He has a neurological developmental issue. Kids with sensory processing, adhd, autism, etc. all might have this impulse. But they'd likely have other things as well that you'd notice. So, more information would be helpful. His age would be good to know, what kind of school and what your son says to stop the activity. Could you send in a fidget to see if that would help change to something that they'd be more okay with?