There is a shailo that I've heard asked by R' Shammai Gross now a few times. The teshuva is not so clear so perhaps the olam here might have some insight. Someone working in STaM and teaching wants to use old batim that are now pasul to teach with. It'll involve "breaking" them apart, cutting, putting holes, sanding, etc, etc. His question is since they were once used for the mitzvah of tefillin and have kedusha even though they are now pasul perhaps it's a problem to do this.
Does anyone have any sources on this or experience?
R' Shammai at first was noteh lhakil however said he's not sure and needs to look into it more. I will post more if there will be any updates.