It is rumored around the Zig that the Bug Man escaped from this location.
The Jail Bird Badge is in the Breakout tutorial zone. This badge was previously unobtainable if it was not collected during the tutorial, but with the release of Issue 11, a second chance is available while revisiting the Zig during the Ouroboros Initiation Story Arc.
From where you start outside your cell, turn right, walking away from H.T. When you get to the cell walls, turn around and you'll see a staircase leading up. Go all the way upstairs, and walk left, with the cells to your right. The badge marker is inside the last cell on the right. It isn't visible, but once you pass close enough to it by entering the cell, you will earn the badge.
Its coordinates are (-2,314, -103, 970).