I think it depends - I would have thought that everyone starts off on "green" and only deliberate naughtiness went to "red" - and that child would have a chance to redeem him/herself by learning what is socially acceptable at that age - surely age-appropriate "problems" (such as not hearing every single instruction, not wanting to do a particular activity if very engaged in current activity) wouldn't be "naughty", right?

Something Liebling did at 2 and was told off for, he now has time out or I don't play with him until he apologises. Age-appropriate boundaries and punishments. And he has a chance to make everything OK and back to normal by apologising or tidying up. Given how peer-influenced school is, it's nice to learn early how to get along with people!