Sorry this post has been overlooked!
I think it would be really helpful to you to read the thread and posts I have in the Library section on kids and cavaliers- this has links to some great advice on managing these kinds of situations. I have also pinned the same thread to the top of the training section here if I recall correctly. All the trainer links pinned in this forum also have good suggestions but I especially recommend the advice on the diamondsintheruff.com website which has good info on kids and dogs, for kids and for parents.
The issue is I am afraid, more managing the child than the dog in these kinds of situations
... Eg that a child should not really be allowed to play with a dog until it reaches this level of excitement as nipping is a risk and all dogs can get like this- the same will happen with a cat. The play needs to stop well before a dog gets to this point of overexcitement. That means parental supervision of all interactions - a six year old no matter how mature is young and vulnerable and also poor in judgement as to when the dog needs to be left alone so wiser adults need to be there to manage play. A child walking away is not really enough- the stage has already been reached where things have gone too far. It is really more that both need to be separated and she needs to leave him be much earlier on in the play cycle. You cannot train a dog to figure out how to do this -- it has to be an adult supervising play and appropriately managing it.
It may be as well that your cavalier doesn't have adequate bite inhibition? Is is generally something trained when they are much younger and a dog with good bite inhibition should never nip unless something happens very much by accident.
Has anyone trained Sparkles (and has your daughter been involved and trained her to where she responds to her, not just to an adult? I am guessing probably not. And what does 'stop' mean? Stop what exactly? A dog has no way to figure this out -- a specific command has to be patiently trained to a specific behaviour. "Stop" doesn't mean anything to a dog unless 'stop' always and only means 'stop jumping' and been trained to mean only that etc It cannot mean stop jumping one time, stop barking the next -- the dog cannot figure out something as complex as changing context. Have you done a good rewards-based training class? This issue would be a good one to discuss with a trainer and as you now have a near adult cavalier, you may need to do some critical remedial work to improve bite inhibition. However that said- kids can sometimes make dogs quite anxious and uneasy in play - just inadvertently - and this could evoke a bite response if the child was not noticing the dog was stressed. It may need a good behaviourist to assist to determine what is going on as situations like this can be easy to misread.
The reason your dog was calmer after a time out was because both child and dog needed the situation to calm down. Your dog probably appreciated the time out as much as your child. The goal is not to get to that overwrought state in the first place and that means stopping the child from playing with the dog earlier (because you will be there to intervene
) and changing the type of play (see below).