Is the failure to return a trust (consisting of a garment tied with a string containing 16 knots) to its original owner, due to suspicion that it is sorcery, considered a betrayal of the trust?

It was obligatory not to open what you were entrusted with and to return it to its owner as requested, for Allah Almighty says: "Indeed, Allah commands you to render trusts to whom they are due." And upon opening the bag and suspecting it was magic, it should not have been destroyed merely based on suspicion, for the matter might be contrary to what you assumed. If you were certain it was magic, then what you did would have been correct. The current opinion is to present the matter to an expert in Ruqya Shar'iyya (Islamic exorcism). If he confirms it is magic, then your action is correct. If it is not, then the safer course of action is to seek your owner's forgiveness or reconcile with him, for you may have caused him financial loss.