When you press down on her head she becomes a little more squat and "ears" come out of the top of her head. Her arms get released converting them from human looking arms into bat-like arms. Her cloak becomes batwings.
If you squeeze her bat-ears, her feet squeeze together and allows her to hold her apple core accessory.
When you release the ears her feet spread out again and she drops her apple bomb. This must be a huge insult in the afterlife.
Here are the instructions from Teacher Creature's card back that show how to transform her,
Teacher Creature is not based on any character from the Tim Burton film. I don't recall this character being in the Beetlejuice cartoon, although it's possible, This figure reminds me a lot of the Real Ghostbusters figure, Granny Gross. I don't think this figure is executed quite as well. Teacher Creature has no real articulation other than her transformation sequence. No elbow, knee, or neck articulation. She looks kind of cool displayed in bat mode.