In February, a court in the central province of Minya sentenced three teenagers to five years and a fourth to a juvenile detention centre for an indefinite period.
Defence lawyer Maher Naguib said at the time that the four had not intended to insult Islam in the video, but were instead mocking the beheadings carried out by jihadists of the Islamic State group (IS).
"Mocking (IS), or any religious group, with a childish joke is not a crime," Nadim Houry, HRW's deputy director for the Middle East said in a statement.
The video was filmed on a mobile phone in early 2015 when the three teenagers who were sentenced to five years were aged between 15 and 17. None of the four have been arrested yet.
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Their teacher who is also seen in the video was sentenced to three years in jail.
In the video, one teenager can be seen kneeling on the ground and reciting Muslim prayers while others stand behind him, laughing.
Later one of them is seen making a sign with his thumb to indicate the beheading of the one who is kneeling.
Egypt's constitution outlaws insults against the three monotheist religions recognised by the state - Islam, Christianity and Judaism.
Rights groups say that in recent years there has been a rise in such cases in Egypt, with the country's morality police also stepping up operations.
The Egyptian Initiative for Personal Rights says that between 2011 and 2013, 42 defendants were tried in similar cases and of them 27 were convicted.
In December, an Egyptian court jailed controversial Muslim scholar Islam al-Behairy for one year for remarks he made on his television programme, in which he called for reforms in "traditional Islamic discourse".