Often timeouts work because it separates the kid from the stimulus and gives them an opportunity to cool off and let their conscious mind reassert itself over their emotions. Not necessarily because they think of it as a negative consequence to be avoided.

Often when young kids do harmful things they are not really "thinking" in that moment. Sometimes it is hard for them to even recognize it as something "they did" as opposed to something that happened to them. Strong emotions, to a little kid, are things that happen to them, not things they do. They don't understand why they do things, sometimes.

The heart of raising a young kid to behave properly is teaching them to understand and manage their emotions. We tell our kid, "you feel angry, and that's ok. It's ok to feel angry. However, you're still responsible for how you behave." And we give her appropriate options for dealing with feeling angry. One of the tools we've taught her is a cooling off period, but we don't label it a "time out" like a punishment. As she has gotten older, she gives them to herself sometimes!