From Official Wiki of the Renaissance Kingdoms

Each county has a prison which holds those who:

  • have been sentenced to imprisonment following a lawsuit in the court
  • have not been able to pay the daily tax while staying in a capital city where they do not have property

Being in prison prevents them from:

Basically, you can only go to taverns and forums.

Moreover, one loses one state of health per day spent in prison, the limit being the "dying" state.

You shouldn't have gone there... ;-)