The major controversy regarding the mechanism of the Wacker oxidation of alkenes at low [Cl-] concerns the mechanism of nucleophilic attack of a solvent water molecule on alkene. Most of the recent mechanistic studies on the Wacker oxidation of ethene have reported that nucleophilic attack occurs by an outer sphere mechanism and not by an inner sphere mechanism. One of the crucial experimental findings in support of the inner sphere mechanism is that isotope scrambling does not take place when deuterated ally alcohol was oxidized under the standard Wacker conditions. In this work, we try to explain these experimental results in the framework of the outer sphere mechanism. We simulated the Wacker oxidation of allyl alcohol using ab initio molecular dynamics (AIMD) techniques in order to probe the detailed mechanism, free-energy profiles, and the rate-determining step. Our simulations show that the mechanism of allyl alcohol oxidation follows outer sphere hydroxypalladation, and the rate-determining step involves Cl- ligand isomerization, contradicting the conclusions from the isotope scrambling experiments. However, by carrying out microkinetic modeling based on the free-energy barriers of the elementary steps obtained from our AIMD simulations, we also observe no isotope scrambling. This led us to determine the genesis of the observed absence of isotope scrambling. Most importantly, here we demonstrate that the absence of isotope scrambling is in fact consistent with the outer sphere hydroxypalladation and cannot disprove it.