vanilla MLO instance.

Adding/removing props

in MLO instance.

Removing props from MLO instance

When you want to edit interior you need to select MLO instance in CodeWalker and RMB click on blue box:
Then in project window select ytyp and add to project. Ytyp will be added.
Then change mode from mlo instance to entity and now you are able to choose any prop inside this instance and delete it. When you delete what you want save ytyp.
Adding props in MLO instance

When you want to add new object into MLO instance, select ytyp -> Mlo -> New Entity, by default will be added prop_alien_egg_01 change it name to prop what you want to place and place it. Then save ytyp
If you have empty MLO ytyp without attached objects to rooms you will get error in CodeWalker and there will be unable to load that ytyp into project. To avoid that you need to place and attach fake or real object into room (not Limbo but room, Limbo got shell) And thanks to that ytyp will be loaded into project without error:
Manually removing props from MLO instance 

Based on vanilla example v_int_4.ytyp want to delete object V_Club_Rack with index1:
So you need to select whole entry for this entity and delete it. After deletion all entities under deleted one will move up by one position. 
That will cause change of all indexes for entities under deleted entity (decrease by 1 for each)
So you need to fix indexes in each room. After deletion all indexes decreased by 1 started from index1, so you need to move each last index in room to next room.
Start with bahclubvestibule room and move index24 into next room named bahclubroom:
Next from room where you added index24 (bahclubroom) move index190 into room bahdanceflr.
Now you need to move index332 from room bahdanceflr, but in next room indexes starts from index335 so theres missing index333 and index334 - they are in limbo... So move index332 from room bahdanceflr and place it in Limbo and from Limbo move index334 into bahclubentry room and delete index340.

It looks litle complicated but when you read it and compare with v_int_4.ytyp i hope you will understand how its works.