I am not a fan of the 'normal' time out (of being yelled at and being made to stand in a corner) however I think it is about how it is approached and as you have described to me does seem like gentle parenting, you are teaching them without demeaning them and are not punishing them by standing in a corner for half an hour 'to think about what they have done', I like the thought of a chill out space that has quiet play activities