When the key "allowAppRemoval" is set to be "false",  removal of apps from iOS device is disabled.  However, if you have the same key defined in another profile with conflicting value, you of course cannot be guaranteed to have the feature setting reversed.   I reckon the status of your custom profile reported in your MobiControl web-console is "failed to install".  Am I right?

You probably have some misunderstandings about conflict resolution between iOS profiles.  In fact, what resolution approach had been vaguely defined by Apple made me believe that the best approach is to avoid conflict in the first place.  So, I think you should modify the Feature-Control profile according to your requirements, rather than attempting to create another custom profile  in XML to override the old setting.   In most cases, you will eventually find out that you are wasting your time, and get failing or inconsistent results.

I've confirmed that all applied profiles with Feature Control have "allowAppRemoval" enabled. The custom XML file is used to arrange apps in a certain order, and it does not "fail to install". 

By revoking the custom profile that arranges the apps in a certain order, it overwrites what I explicitly define in Feature Control to allow app removal. This is why I tested the key value by manually defining "allowAppRemoval" as true, but that failed. My apologies if I wasn't clear, but essentially I've ensured there is no conflict between profiles when it pertains to Feature Control.

I am sorry I have got even more confused by your latest post.   If you use a custom profile to change the app order/layout of the home screen, there is no need to include extra line in the same XML file to modify the value for the key "allowAppRemoval". Whatever options set in other feature-control profile(s) will not affect the re-ordering operation defined in your custom profile.  So, I don't really understand why you have any issue.