Including

"The rebels killed people indiscriminately, including women and children."
"The rebels killed indiscriminately, including women and children."

Is the second sentence acceptable? Is including in the second sentence dangling, since the larger group in which women and children were included is not stated explicitly?

They are both acceptable.

But, in:

"The rebels killed indiscriminately, including women and children."

the verb killed is intransitive.

Kill can be used both transitively and intransitively. Check it out here.

Rover

There is ambiguity in the second that I don't see in the first. In the second one, it's possible to read it as even the women and children among the rebels kill people indiscriminately. Less likely, but possible.