Just to be clear, if there is an issue here it relates to WM Money Center transactions with certain (but, perhaps all) VGC with PINs-- not particularly to MOs.
Anyhoo, I stopped by my local Walmart (PHL area) this morning. This location has the upgraded customer terminals and is running the latest software. I did a $2K BP and what I observed is consistent somewhat with what has been described and, happy to say, easily addressed. Yes, the swipe now does not automatically take you to the cashback request screen; rather it seems to just hang as if waiting for authentication. If you do nothing for a short while, it does return an error to the cashier that credit is not permitted. If you push the change payment button, you can then choose debit, then to cashback selection and then to PIN entry.
My cashier did not appear confused (she in fact told me after the first swipe I had to select debit) and all in all, it took no longer than any of my previous visits.