I agree with JR.
Same as the team using the entire (or wrong half) of the floor during warmups when the other team goes in -- direct the coach to follow the rule and if he doesn't take care of it, well, we have a rule covering that, don't we? (And I recognize that other states may not be dealing with this at all, but this was covered in our rules presentation. Not the penalty, but this seems pretty obvious to me.)
Have to say, though, that I don't really pay attention to how a team uses its timeout as long as they are in the right area and are ready to go on the second horn.
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