This is a valuable idea with a lot of potential! I agree that there is clearly a need to build empathy early on. Playgrounds could do with fewer bullies...
I can imagine a child reacting to the toy differently, playing with it or not, depending on which "face" is showing when it's made available to them. Does this suggest having the "happy face" as the default state, perhaps through spring detents or weighted components?
I can also imagine interesting reactions to "mixed expressions" such as happy eyes/sad mouth. Would this cause confusion with very young children? And with children old enough to talk, do you think this would prompt "teaching moments" about insincerity?
How large do you envision this toy? Does your design have thumbwheels connected to the rotating drums or are they large enough for the child to poke a finger in to spin them? Does that expose pinch points that you might want to mitigate?
Could there be a doll body to attach to the face for older children to extend the play capability?