If this is an in home daycare, then your provider gets to decide alot of the rules. That being said, you also should have been told this was the route she was taking.
For me,as an in home provider of 15 years, children must sit at the table during meal times. But it is up to them to eat the food. They are not allowed to get up an wander around or to be disruptive (singing or clapping or making faces, etc at the table). If they become overly disruptive as a ploy to get away from the table, they do go in a sort of time out. We call it a "sit down". They would then leave the table, but have to go sit by a wall (not facing it, just sit down), where I can see them, but the kids can not so they can not further distract them from their meal.
I do not have the resources (its just ME) to allow one child to go back downstairs into the playroom, while I supervise the meal of the rest of the children. So if one is not being accommodating to meal times, this is what we must do here. It is not fair for one child to completely disrupt a nice meal time for the rest of the group either, in my opinion. If a child is to be in group care of any kind, that comes with some "rules".
As far as food on demand, that is generally reserved for infants in care only. By the time children reach a year old or even a bit before (each child is different in the bottle drops and table food issues, but a year is a the good guideline), they are all on the same schedule. For me, its breakfast as they arrive between 7-8am, a small snack of a few crackers with fruit or milk about 10 am, Lunch about noon-12:30, then another small cracker snack about 4pm. Food is offered often thru the day here.
You definitely need to get some explanation of the "time outs" and perhaps some further discussion on the eating issue. If she is a licensed provider on a USDA food program, you can not force a child to eat anything. The key phrase for their programs is to OFFER the food. It is against regulation to "force" a child to eat anything (not that anyone can anyways!), but you do not have to offer anything else at non meal times. For most providers it is a nightmare to attempt to do so. We need to keep a good schedule with meal and nap times to stay sane and keep things moving along in group care.
Best wishes!