You are so good for taking in rehomes. I know it's hard, but still, every pet deserves a loving home.
I am so, so sorry. I didn't have time to read every post, so if this was mentioned, my apologies. I try and help when I can on this board because everyone has been wonderful to me.
Anyway, dogs don't understand time outs. It makes no sense to them. They might realize they're in trouble, but don't understand the concept of time outs. A human child will think about what they did wrong...a dog does not.
I found this article on-line. It may help:
Multiple Dog Household, Help them get along
Please let us know how it goes.