Definitions for padded cell
A padded cell is a cell in a psychiatric hospital with cushions lining the walls. The padding is an attempt to prevent a patient from hurting themselves by hitting their head on the hard surface of the walls. In most cases, the person placed in a padded cell is compelled to be there. A padded cell is sometimes colloquially known as a "rubber room".
The New Hacker's Dictionary
Where you put lusers so they can't hurt anything. A program that limits a luser to a carefully restricted subset of the capabilities of the host system (for example, the rsh(1) utility on USG Unix). Note that this is different from an iron box because it is overt and not aimed at enforcing security so much as protecting others (and the luser) from the consequences of the luser's boundless naivete (see naive). Also padded cell environment.