Green’s Dictionary of Slang

one out n.

1. (Aus. prison) a prisoner who prefers his own company.

[Aus]B. Ellem Doing Time 193: one out: a loner.
[Aus]Tupper & Wortley Aus. Prison Sl. Gloss. 🌐 One-out. 2. A prisoner who keeps to himself.

2. (N.Z. prison) a fight between two individual inmates, a fight between two representative members of warring gangs, thus preventing large-scale fighting.

[NZ]D. Looser Boobslang [U. Canterbury D.Phil. thesis] 131/1: one-out n. 1 a one-on-one fight between two inmates with an existing disagreement. 2 a fight where a single opponent is spontaneously and randomly picked out of a crowd of inmates. A variation upon this type of one-out may also occur when there is a disagreement between two gangs or crews. Rather than everyone joining in for a free-for-all and causing widespread injury, one person may be picked to represent each crew in a one-on-one fight to sort out the matter.

In phrases

do one’s lag one-out (v.)

(N.Z. prison) to serve one’s prison time without joing any gang or similar grouping.

[NZ]D. Looser Boobslang [U. Canterbury D.Phil. thesis] 131/1: do one’s lag one-out adv. to serve one’s sentence while remaining ‘neutral’, i.e. resisting involvement or affiliation with, or recruitment into, any gang.