Wow a ghost boy looking to a corner as punished is very creepy and sad, i think about how his soul is condemned to eternity to be punished, if there is really a spirit there, he should be put on freedom someway.
Kids usually watch a lot things adults can't see, and if difficult to realize if is about their imagination or something real.
I believe she believed that she saw it ...
Set it free, I never asked my SIL about it after that time
I also don't bring it up because she doesn't like talking about it...