Hey there! They are specifically asking for an academic environment here. So work would NOT count. Not in this case—they are likely asking because there is an honor code at their school, and they want to be sure that you are comfortable making tough, smart decisions. But yes, it does have to be in a school-related setting. If, after school, you did research at a university, that would work too—after all, it would still be an academic setting, technically. Good luck! And I hope you get in, Boston is an amazing city!
Tell the Admission Committee about a time when it cost you to maintain your integrity and what you learned from the experience. Who was affected besides yourself? Was there anything you might have done differently? Would you make the same decision again if given the chance? (500 words)