Mac Allister fouled Arsenal captain Martin Odegaard before shouting at the Norwegian international while he laid on the ground.
Jurrien Timber confronted Mac Allister before Noni Madueke moved towards Mac Allister, and their foreheads made contact. Mac Allister threw himself on the ground, desperate for Madueke to be sent off.
However, despite a lengthy VAR check, no red card was given Timber and Mac Allister were handed yellow cards.
After the game, Carragher revealed that he was glad no red was given as incidents like this become more common due to the current rules surrounding contact to the head.
"I'm delighted he didn't get sent off there. We have really got to be strong and start calling people out and say 'this is embarrassing'. It's got to stop, it's ridiculous. I can't stand it.
"This head-to-head stuff... if someone puts their head back and butts, of course, red card. But this stuff where they go head to head and if someone touches the other goes down and the player gets sent off... as a game, people in the Premier League, supporters, call your own out for it."
"I'm a Liverpool fan and it's a joke from Mac Allister, it's got to stop. People are trying to gain an advantage because they know they can, because red cards are getting given for it. Whether it's from Howard Webb, the Premier League, the managers get together, stop getting red cards for this c***!"
There was arguably a bigger refereeing controversy of the match earlier on as Alexander Isak was pulled back by Timber as he went up for a header.
The referee did not award a penalty, and VAR did not intervene, whilst Andoni Iraola described it as a clear penalty and that the striker should have dived much like Mac Allister, raising the question of when players can be dramatic to gain an advantage.