The protocol doesn't specify decorations. It is up to the compositor. The reference one, Weston, was using client side (I think Mutter is doing that too) while Kwin is using server side.
It is a personal choice. And Wayland the windowing system doesn't care what you do - its decoration agnostic.
That's not necessarily true. If your toolkit and compositor don't agree on whether you're using client-side or server-side decorations, then you're going to see either double decorations or no decorations.
Most of the core Wayland team believes that client-side decorations is the technically superior approach for efficiency and accuracy reasons, and we're disappointed KDE is still pushing for server-side decorations.
There is currently no protocol to negotiate between the toolkit and compositor whether to use client-side or server-side decorations. And I can't see one being added in the near future, either.
It's simple and slim, and therefore hopefully more performant.
And then there was some drama about client side windows decorations, that I didn't quite get.