I like the consequence to a wrong doing to be swift. (Ecc. 8:11 “When the sentence for a crime is not quickly carried out, the hearts of the people are filled with schemes to do wrong.”) Quickly administered and just as quickly over. At our house, once a situation has been dealt with and reconciliation has been made, then it is not to be brought up again. (Hebrews 8:12 “For I will forgive their wickedness and remember their sins no more.”) Forgiveness is a beautiful thing.
With time outs I see a parent talking a lot (Proverbs 10:19 “When words are many, sin is not absent,”) and then firmly pointing a child to their time out. (Proverbs 29:19 “A servant cannot be corrected by mere words; though he understands, he will not respond.”) What does the child do? They stomp to their place and sit their glaring. The whole time is spent muttering how unfair the punishment is and how mean Mom is. (Proverbs 12:15 “The ways of a fool seem right to him,”) After the given amount of time is up, the child goes free and no reconciliation has been made.
Perhaps this is not how time outs look in your house and perhaps they work for you. Biblically I do not see anything that says not to use time outs, but at the same time I do not see anything that promotes them either.
One disclaimer: we have sent children to their room until they can find their joy. Not as a punishment though, as a help. At times emotions get going overtime and a child can be having a hard time pulling it together, even though a parent can tell they are trying. At that point, I might give them some room to regroup by saying, “Why don’t you go to your room and come out when you have your joy back.”