i would always want to be told if my children had misbehaved, but i would always expect the parents of my friend's children to appropriately tell off my children too, rather than watch the bad behaviour and do nothing at the time
when i drop my children off i always say something along the lines of "please feel free to tell them off" just so that parents know it is ok.
however, my oldest is only 4 so her capacity to remember is different, they need more instant conflict resolution/telling off.
i've actually noticed that a lot of parents think the worst of their children (or at least, that's what they say aloud) rather than assuming their children are innocent.
eg, if DD's friend's mum and I are in one room and our 4 year olds are in another and one starts crying, we will both go in and assume our own child is at fault. eg if my DD is crying, my friend will assume her DD hit mine, and I will normally downplay that by saying "oh, my DD's tired, im sure it's nothing" or assume my DD is crying because she's not been able to share etc.
i often feel bad about this, it's like some sort of politeness competition to downplay your own child's innocence and exaggerate their culpability.
can't wait till my DD is 13! 