No it doesn't. Doors can be locked for individual Sims so if if you want to make something that has absolutely nothing to do with actual prison life (except locking some sims up) go right ahead. Maybe if you describe what would go on in this "prison"
I just read about the rules for Asylum Challenge. You just set up some rules for your household such as must have certain traits, must have a certain career. Limited funds a stuff. Nothing to do with a Asylum. If you think that is funny just create your own rules and call it Prison challenge. If you want a "real cell" the Get to work expansion has that.