I think suspensions and expulsions should remain options but last resort and before we get there opt for other kinds of activities which could change their behavior. It'd be interesting to see if those tactics work or if they become "badges of honor" rather than disincentives.
That said, this bill isn't banning suspensions entirely for violent or bullying behavior. They just can't suspend students for willful defiance, which as the stats showed has some clear racial bias associated with it.
I’m also unconvinced that prison work is bad. Should they just hang out and do nothing? When tied to a shortened sentence, prison work seems just fine.
In the case of public schools using child labor for discipline one possible problem is that the children, if they were actually effective laborers, might tempt a school district to suspend more children to get more work done around the school, and possibly even reduce the number of maintenance workers they hire. You'd want such a system strictly regulated and audited to ensure this sort of thing doesn't happen.
Somewhat related: https://en.wikipedia.org/wiki/Kids_for_cash_scandal