chapotraphouse

Do teachers who do this really think it discourages the disruptive kid

The key thing here is that this isn't designed to directly discourage the kid, the purpose of doing this is to get the other kids to let's say do some creative persuasion techniques to not do that again. You might recognize this as one of the stereotypical methods that a military would do when dealing with problem soldier, punish the whole unit/squad instead of the single soldier.