I'm still running Ubuntu 10.04 LTS with GNOME 2.30 at this late date and just encountered this problem after installing LibreOffice 4.3.5, using a DEB archive obtained from LibreOffice.org.  I didn't like the way the installer put the entries in the Applications menu and began editing the menu with alacarte (System -> Preferences - > Main Menu).  During this edit I made a mistake, deleting a menu item, so I clicked on the "Revert" button, after which havoc ensued.  A number of custom sub-menus changed from their original names to "alacarte-made-x", where "x" was some number, and those entries became non-editable.  The problem appears to have been caused by alacarte improperly deleting one or more of its .directory files in /home/<user>/.local/share/desktop-directories and *possibly* by the LibreOffice installation causing additional corruption.  I was able to recover by using the following steps.

1. In a terminal window in my home directory, I executed
   sudo chown -R <user> .config/menus
   sudo chown -R <user> .local

   (Substitute your user name for <user>.)  This fixes improper file ownership issues.  Some of the alacarte-made non-editable menu entries now became accessible with the Properties button, but several  menus became cross-linked, so that when the name of one menu was changed in the menu editor, the name of another, completely unrelated menu also changed.

2. I looked in my .config/menus directory to find an "undo" .menu file with a time stamp just after the new package was installed.  This was easy, because the file with LibreOffice 4.3.5 had entries containing "4.3.5" that could be found with a text editor.  I renamed applications.menu as applications.menu.bak, then copied my chosen .menu.undo-xx file to applications.menu.

3. The first two steps still didn't fully correct the problem, but by looking in .local/share/desktop-directories and examining the contents of the various .directory files and comparing what alacarte-made-x entries there were displayed in my Applications Menu.  From this I was able to deduce which .directory files were missing and using gedit I was able to recreate them, using the existing .directory files as a template.  Once the missing alacarte-made-x.directory files were restored, the cross-linking of submenu entries in the Applications menu was fixed, allowing all submenus and items to be edited normally again with the Properties button.

A more drastic alternative would have been to wipe out the contents of .local/share/desktop-directories and .config/menus and start over, but a bit of patience in performing manual repairs as described above saved me many, many hours of menu creation and customizing.

I think this may not be a bug in alacarte as such, but a general lack of robustness in the GNOME 2 menu and the design of alacarte, in that alacarte is unable to detect corruption in the menu files or missing directory files, and simply gets confused.  The utility should have automatic error detection and correction built in, or a button or menu that can be invoked manually by the user to repair the menu structure when something goes amiss.  There may also be problems with the way the Revert feature works in alacarte, which *may* have been the cause of the problem in this instance.