I can see how it works.
A child does something they shouldn't, because they're a kid. The teacher saying 'when we're in school, we must always do x because we're caring and....'. Kid zones out at the wall of words because at the same time, they can hear two kids whispering on the table to the left, there's a large lorry going past the window, Mr Smith can be heard telling his class that it's time to...., the class above are on the move (or about to come in through the ceiling, going by the racket of chairs), there's a pair of Magpies chattering in the tree, the really bright display is drawing the child's attention to that and there's a pile of things on the windowsill next to the display. At home, they'd know they'd done something wrong because they'd get a slap round the head, not entirely certain what, but it certainly kept their attention on the parent. Child then goes on to do something else because it hasn't really registered with them or spends the entire day thinking they're in trouble and the teacher doesn't like them, they're a bad child, even though they've actually done really well for the rest of the day.
Or, child kind of zones out, but see their name being moved underneath the raincloud. They don't like it, but it means they can see it and they want to move to the rainbow or maybe even the sunshine. So they try hard and the teacher moves their name to under the rainbow in response to answering a question 'Well done!'. Child feels happy and sees their name under the rainbow through the day, so continues that behaviour and gets moved under the sunshine at the end, coming out of school happy - or is reminded that they did well under the rainbow and tomorrow is another chance to get to underneath the sunshine.
Or child doesn't understand a great deal of English. But can recognise their name under a cloud, under a rainbow and under sunshine.
It's a far simpler, visual and physical message than a stream of words that could be misunderstood, misheard and promptly forgotten. It shows there's always an opportunity to make improvements, of redemption if you will, rather than permanently feeling condemned or battered by words as well as sound, sight, textures, smells and everything else in a school. It shows a child who doesn't have a huge working vocabulary in English what behaviour is discouraged and what is desirable.
There are worse ways to achieve this outcome - keeping a secret list means they get surprised by it at the end of the day when they could have forgotten what it was that they did/didn't do, for example.
The visual guide and prompt is the effective and less harmful way of achieving the end of a child able to learn and form friendships/relationships with others.
I know I'd have benefitted from it because I never really learned anything from being talked at, I had to see and do things for them to sink in.