I have recently worked with several parents of adolescents and elementary school children who are wishing they had the time-out policies that they used effectively when their children were younger. I am a strong advocate for a moderated approach of the Time Out/Chill Out space.
We often send a child to a time out as a punishment, wanting them to get away from the situation and behave differently. Time outs can be very effective for this. At the same time, we want to teach self-soothing, pausing, thinking about one's thoughts and actions, and being mindful of what is going on.
Make the space a somewhat comfortable but separate space, where you as a parent can watch the child from a distance. Allow for self-soothing activities (e.g. coloring book, listening to something, etc.). Keep track of the time, preferably setting a timer for how long the child or teen should be there. Encourage the use of this space for the child to de-escalate when things are getting heated or otherwise emotionally charged. Remember: the goal is not to reward or punish, but to create a space for mindful awareness, to take a break and re-center, or to pause to reconsider one's actions and/or behaviors.
It can be difficult to find the balance between making the space pleasant and enjoyable and still a consequence for unacceptable behavior. In one classroom of fourth graders I consulted with, we created a chair in the back of the classroom where the child sent to Time Out/Chill Out could put on headphones and either color in a design or mandala, or do a puzzle. This was also something that I used in a class I taught with high-school students, and we used the same tools (it worked!).
We want to make it clear that negative behaviors (that lead to the time out) are unacceptable and will not be tolerated, but we also want to acknowledge that the behaviors (most likely) were connected to thoughts and emotions that also need some work and attention.