Not only did something like that actually happen, it happened exactly like that.

First, we need to talk about the First World War in general. As you've mentioned, the historical memory disseminated by schools or through popular culture often ignore the World in world war. With this, I am not talking about geography. What makes a world war a truly global conflict is not the fact that it is fought on almost every continent in the world, but because it is fought with people from all corners of the world. During the war, the Western Front was the most multicultural and multiracial place in the world.

In 1914, The empires of Great Britain and France held some of the largest Muslim populations in the world. If we re-conceptualize it, we could even say that Great Britain at the time was the greatest Muslim power in the world. Colonialism is what made this possible. Millions upon millions of Muslims lived under British and French rule in Asia and Africa. At a time of war, it would make absolute sense to see this population as a potential weapon that could be used. What if you could make millions of people rise up against their colonial masters? What if you could make colonial troops mutiny and revolt? What if you could turn Muslim Prisoners of War into soldiers fighting for your cause? What if you could entice neutral Muslim powers into joining Germany? These strategic understandings come from a place that understood the importance of colonialism to the war and the larger colonial world that was mobilized into supporting the great powers involved.

To accomplish this, Germany turned to the Ottoman Empire. In November 1914, the Ottoman sultan Mehmed V officially declared Jihad, followed days afterwards by the issuing of fatwas in order to legitimize it. Germany and the Ottoman Empire sent out agents across the world with instructions to incite revolt. Propaganda was spread and in Germany proper, a model Prisoner of War camp (the Half Moon Camp) was built exclusively for Muslim prisoners in Wünsdorf, complete with the first ever mosque on German territory, in order to convince them to join the German/Ottoman cause.

What came out of it all?

The widespread revolts that Germany had hoped for never truly materialized. In Libya, the Senussi did again take up arms against their Italian colonizers and threatened British Egypt in 1915 and 1916. While the Senussi were beaten back from the frontiers of Egypt by British forces, the war continued in Libya for Italy. More than 40,000 Italian soldiers were stuck in Libya in 1917 -- soldiers that could have been used better elsewhere.

Other attempts to incite revolt or get neutral Muslim powers to join Germany came to naught. A daring German expedition to Afghanistan in order to convince Emir Habibullah Khan to declare war on Great Britain came to nothing. Localized revolts partly influenced by the jihad did take place in Singapore and Hong Kong amongst Muslim troops from British India, but were all struck down. Other widespread mutinies or revolt did not take place amongst British forces. While there were a number of Muslim soldiers who were recruited from prisoner of war camps, they were not nearly enough to make much of a difference. Some of these prisoners of war were used for propaganda purposes and were even involved in the expedition to Afghanistan, but nothing more came out of it. In one specific case which echoes modern day events, two Muslim men in Australia made their own attack against their perceived enemy, influenced by the announced Jihad. See this post of mine which explores this event.

In summary, Germany tried but failed to achieve anything tangible by their attempts to incite revolt in British and French colonies. Yet the fact that they had tried shows the importance of the greater world in the strategic thinking of European powers and in particularly the importance of the non-European populations mobilized by them.