If my son misbehave, I am quite happy when a parent comes in and says no-no, I think it teaches him boundaries and rules, and that these are normal for everyone, not just from parents.
In the other hand, nothing is worst in my opinion than parents who sit back and wait for their kids to REALLY misbehave to intervene. We went on holiday with friends, and it turns out that screaming, tantrum throwing, loud mouth and extreme hyperactiveness was tolerated (or rather ignored) unless we (me and my husband looked terribly annoyed. At first I tried to calm their daughter 4 (and our son -3- who was getting hyper from her behavior), but they would not give a wit about it, so we started to forbid our son to sit with her at meal times, to sit with her in the minivan, etc, so they started to get the point only then, as if they were happier to see us discipline their kid rather than doing it themselves. They slowly got it and started dealing with their daughter misbehavior, but I think they were also a bit annoyed with us, as if we were annoyed to have to watch for them, when most of the time they do not care, leaving the older boy 8 to look after her (and he is rather calm). Several times, we ended up watching our kids and theirs while they were having a quiet coffee. I found this really uncourteous, even if their kids are a bit older, would be a simple gesture to join when one parent alone is getting involved with everyone's kids.
In short, despite the fact that we knew these friends for a long time, and that we did holiday (beach ones) before, this specific holiday was horrible, and somewhat ruined our friendship. Nothing specific was ever discussed about it since, but I am sure I will NEVER do a holiday again with them, and not even a weekend out to some places near...