I agree with all PPs...this sounds like an unhealthy situation for your daughters.
There is no way I would ever expect a child to be responsible for telling anyone else about being done with her materials (I am AMI trained, 10 yrs in Children's House, FYI). First of all, if something is being used by another child, there shouldn't be anyone waiting around for it to be done. The child who wants to use it should be helped to find something else to do unless he is observing quietly. Secondly, I can't imagine putting a child in "time out" (does she use these words?) for anything so trivial for so long a time. M only refers to using a variation of time out for extreme cases (when a child is being extremely disruptive or aggressive behavior). Her version was to sit the child down at a table, in full view of the class, and bring him different activities to do. She believed that only through activity could children develop discipline. She discusses rewards and punishments (and advocate for neither) in Absorbent Mind (Ch 24), The Discovery of the Child (Ch 4), The Secret of Childhood (Pt 2, Ch 2). She also discusses that every child should have free access between indoors and outdoors and would never hold a child away from outdoor activites for any reason whatsoever. Actually she views being outdoors as an essential part of good health and has written extensively about the child in nature. (Discovery of the Child, Ch 5; others) M advocates respect for the child, understanding three levels of obedience and normalization as a process as well as not making a child's mistakes obvious in a punitive way. Another very pertinent topic here is the spiritual preparation of the adult and that the adult needs to cultivate humility and not be so concerned with controlling everything ('the adult needs to have trust that the child's true nature will reveal itself...'). Here are some references for the role of the Directress: Absorbent Mind, Ch 27, Secret of Childhood, Pt. 2, Ch 1. Let me know if you have other books or if you don't have any, I could post a few quotes for you if it would help at your meeting.