When I was a young teen, I volunteered at the local YMCA to help set up a "haunted house" (actually a squash court) for Halloween. One of the decorations I pulled out of a storage closet was a display skeleton. I set it up and was having fun playing around with it when I noticed it had some metal fillings in the teeth...and everything was a bit TOO realistic.
I'd like to give it a respectful burial, without causing a police response.
Unfortunately that's not an option.
A respectful burial means contacting the authorities so that the remains can be properly identified, and their final disposition noted in the public record. Remember this was once a human being, likely with many relations, however far back. The remains could be of someone entirely forgotten, but could be the missing link in some family's long and painfully sad story, also.
Meanwhile, the tail risk of getting into some kind of trouble for attempting to sidestep this necessary process is quite considerable.
So there's really only one course of action available to your father's heirs. Since there's also a small but considerable chance of being hit with some kind of charge (even if you do contact the authorities in perfectly good faith, and presuming of course that no hanky panky was involved in acquiring the skeleton on the first place), the first step will be to contact a criminal defense lawyer.
Right, but contacting authorities implies automatically a significant chance that the police will be contacted also (no matter what they might say to you initially).
Once that happens, you have no control over their response.
I was going to look this up to verify, but realized googling "do they still sell actual human..." probably isn't something I want in my search history. So, I'll just say, as a not-noo-fuzzy-recollection, I'm pretty certain that to this day some people who's bodies are donated to science may end up as actual educational props for medical students. In that light, the above thoughts about wanting/needing to track down this person and contact families seems unnecessary as that person did this intentionally.
That said, I absolutely recall seeing a documentary, in modern day, showing people's bodies used in science exhibits to this day. Their point was that while people had voluntarily donated their body to science, they were mostly unaware that this type of display was something that might happen.
What about calling the med school back? They may have a use for it for teaching (as your dad did), and if not, it should be a question they are familiar with.
I still get the heebie-jeebies thinking about it.