How does God discipline His children and what does this look like?
Simply put, the Lord's discipline can take virtually any form. The particular form discipline may take is less important than the lesson it teaches us. Anytime the Lord brings discipline into our lives, He will also bring Spirit-given insight to ensure we understand the lesson. As we seek the Lord in prayer and through study of His word, we will receive the Spirit's counsel and come to understand the Lord's purpose in the trial.
For example, when Paul was afflicted by the Lord, he sought to understand his affliction and the Lord answered him:
2Cor. 12:7 Because of the surpassing greatness of the revelations, for this reason, to keep me from exalting myself, there was given me a thorn in the flesh, a messenger of Satan to torment me — to keep me from exalting myself!
2Cor. 12:8 Concerning this I implored the Lord three times that it might leave me.
2Cor. 12:9 And He has said to me, “My grace is sufficient for you, for my power is perfected in weakness.” Most gladly, therefore, I will rather boast about my weaknesses, so that the power of Christ may dwell in me.
Notice that Paul was afflicted first, then he implored the Lord to remove the trial, and finally the Lord responded with understanding so Paul could learn the lesson. In Paul's case, the Lord was concerned about Paul's pride. Since Paul was granted such extraordinary revelation, the Lord chose to afflict Paul as a reminder that he needed the Lord's strength to succeed. This is the Lord's purpose in bringing discipline in any form.
So as the Lord chastises us, we can expect He will also "connect the dots" for us so that we may understand and appreciate the purpose in the trial. Then it falls to us to receive that discipline, learn the lesson and profit from it.