S.N.
First off, to clarify, according to the language in the staute I read, and will paste below, there appears to be nothing wrong with babysitting in your home. If there were, I imagine most of us would be guilty of it, anyway.
"(e) "Child care center" or "day care center" means a facility, other than a private residence, receiving 1 or more preschool or school-age children for care for periods of less than 24 hours a day, and where the parents or guardians are not immediately available to the child."
Please note it specifies "other than a private residence."
Now, I agree that you should just keep an eye out for suspicious markings, and in the meantime, discipline the behavior issues with the appropriate time outs, and such. You might also ask mom what her method of discipline with such offenses is. This could let you innocently gauge her reaction, and you can just make clear as you ask that it's just so that you are using discipline that is familiar to the child's usual discipline. My thought is, if mom acts overly nervous about the question, you might want to pay extra close attention for danger signs. But, it could just be that the parents don't discipline at all. So, don't make any rash decisions, based on a poor reaction to the question, either. Good luck with this.