Bully occasionally shut up about prison (5)
I believe the answer is:
gulag
'prison' is the definition.
(gulag is a kind of prison)
'bully occasionally shut up about' is the wordplay.
'occasionally' indicates alternate letters (letters taken at regular intervals or occasions).
'shut up' becomes 'gag' (gagging is a kind of shutting up).
'about' is an insertion indicator.
The alternating letters of 'bully' are 'ul'.
'ul' inserted inside 'gag' is 'GULAG'.
(Other definitions for gulag that I've seen before include "Labour administration" , "Harsh labour camp" , "Russian prison camp for political prisoners" , "Soviet political prison system" , "Russian prison and labour camp organisation" .)