The sentence saying a 2nd part of your vault can be used as a holding cell appears after the sentence for the upgrade (to 16 total capacity). Does that you get a cell only after the upgrade, or is the sentence meant to apply once you have a basic vault?
I read it as, part of your vault can be used as a holding cell - ie, 4 coin storage is now a jail cell if you need it. But you could argue that you keep your prisoners in view of all your ill-gotten gains, just to taunt them.