Sometimes when my cat Oscar is feeling particularly excited and bitey and will not chill out, especially around my sister (she's pregnant) I will put him in timeout. I don't know if it works well in the long run but I have had success with it, I will set a timer for 3 minutes or so and put a clothes' basket over him, like he is in kitty jail. I don't keep him in jail for longer than 3 minutes and when I release him "on parole" he is back to his best behavior .
That is cute, while I used to have a daycare and used time out I never would have thought to use it on a pet, and I'm surprised it has worked, but I believe cats are smarter than people give them credit for.
When my cats are acting out, I get out the cat toys. They usually respond well to that and after 5 minutes are too tired to cause trouble.
Next time your little one is in "jail", I'd love to see a picture of it.
I used to put my cats in "kitty jail" as a kid, but I my Mother would yell at me when she caught me, so I stopped doing it, haha. My cats are generally very well behaved; they're old so they're pretty chill the vast majority of the time. Sometimes the old man will walk around the house, yowling at the top of his lungs, but I usually just throw something at the door and he stops.
My step-mothers cat is a stinker, and he's always acting up! I usually just loudly say "NO" or "STOP THAT" when I want him to cut it out, and after saying it once or twice, he usually does.