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It would seem much more likely that this would be (as you say) a toy application — showing notes which have been in contact with cocaine, notes smeared with disease-ridden kid snot, etc. 🙂
Also, the Bank of England has instructions on non- or low-technology techniques to identify counterfeit bills.
Instructions are also available for Euro currency:
and US currency:
Given this, I don’t see an app as more than toy, as you say, although I’m sure you can find lots of interesting facts, such as identifying US bills which have been tested using a marker. I suspect you’re unlikely to see a real counterfeit bill — I don’t see any police department agreeing to let you test known counterfeits; they’ll probably refer you to the treasury.