In my experience, and that of anyone i've spoken to about it, walla should always be included in the M+E. In fact, sound effects editors are often responsible for cutting it in, and take great care to remove or blur any kind of distinguishable words using various techniques.
If you think about it practically, an M+E should contain everything except language. Sometimes you might have a crowd scene that does involve distinguishable language. This will often be made up of (A) walla laid in by the FX editors and (B) some separate call-outs taken from the location recording, or recorded in ADR/loop group. The walla FX track creates the body and texture of the crowd, while the call-outs provide the detail. This way, a studio dubbing the film can record their own call-outs in the target language, while keeping the body and texture of the crowd.
It's not always so clear cut. You might have a crowd speaking in unison (eg. a group of soldiers saying "Yes sir!"). In that case, nothing should be in the M+E. But what if the same group of soldiers emit a non-verbal grunt later in the scene? Do you include the grunt even though you omitted the "yes sir"? This is where you'll have to make a judgement call, or make use of an "options" track like i mentioned in your other question.
I hope that helps!