You keep overwriting and assigning the same global variable. Instead, add a new array key with the formatted time:
$row_entries["formatted_time"] = date("H:s:i", $row_entries["time"]);
$list_entries[] = $row_entries;
You can also just overwrite the existing time
key if you wish. Then when you loop though $row_entries
in your template, just output the formatted time without a modifier.
{ foreach from=$list_entries item=row }
Time: { $row->formatted_time }
{ /foreach }
You might be interested in making a custom modifier that formats dates a little easier (if you use the same formatting a lot), so you can use something like:
{ $myDate | myDateFormat }