For all intents and purposes it *is* black powder, or at the most akin to our modern smokeless powder.
Without a containment vessel it just goes poof with a flash and nasty brimstone stink… but shove it into a vessel and, well, we all know what happens…
The development of true explosives using the dust would be difficult and even more rarely encountered than the dust alone; mostly due to the difficulties of metallurgy in creating suitable containers. Clay would work, but limit the yield, but make for some right nasty inventions.
Combine the dust with some finely powdered coal dust in a clay vessel and you've got a right nasty incendiary that would make a very poor catapult load but a very effective grenade. If fabrication of a suitable metal container could be perfected, however, such devices would be devastating siege projectiles.
But rare, and highly dangerous. Thomas would very quickly forbid any sort of development anywhere within a league of Metamor's walls so any attempt to develop such things, even simple pyrotechnics, would have to be secretive and separated from the Keep to such a degree that there is a very real risk of it being stolen.
One suggestion, however: The local mines, however, would be very very interested in explosives. They might be very willing to fund such experiments if a reliable source of the dust could be established. It would also make another valuable trade item for the Keep, and make attackers extremely cautious.