As noted, a deadlock (or deadly embrace) is not the same as a timeout, even though they both abend due to lock contention.
It seems that you have a timeout that is caused by a wait on a locked resource that has exceeded the time allowed per your lockwait time specified for the DB2 system. This could be caused by lock escalation, where DB2 has escalated an application from Row to Table level locks based on the amount of lock activity. Lock escalation can often be curtailed with the maxlocks and locksize parameters.
Lock contention could also be caused by applications using RR isolation level where they keep a lot of row locks until commit time. You might see if CS isolation level is acceptable for such applications, and use it to improve concurrency.