Firstly, "Immutable by default" is recognised as a good design feature now for modern languages. But there is plenty of code in existing languages like Java, JavaScript, C, C# etc. which does not follow this rule.
Secondly, the "principle of least surprise" suggests that function arguments should work like local vars in that language. So if local vars are immutable by default, then arguments should be as well. Or if local vars can be optionally declared as immutable, then function arguments should be as well.
I can't really say what's the best for every/any language. It's not one size fit all. There are always design tradeoffs and differing schools of thought. But these days it looks a lot like "immutable by default, unless there's a good reason otherwise" is a good starting point.
Example of immutable assignment: int n = 2
Example of reference to mutable value: ref int n = (heap int := 2)
However, in order to make Algol-68 code look more similar to Algol-60, they introduced backwards-compatible shorthands, so for example the declaration int n; was actually a shorthand for ref int n = (loc int);
This shorthand magic probably contributed to why Algol-68 syntax was perceived to be difficult.
Footnote: loc and heap were the two memory allocation operators available in Algol-68.
Here is an example of using a recursive function in Erlang to sum up a factorial.
fac(1) ->
1;
fac(N) ->
N * fac(N - 1).
Where mutable variables are needed, I prefer to hide that logic inside a method that exists solely to do that dirty business on an abstract level, not specific to my business logic. That let's me test the 'dirty' mutable method in an isolated place and removes a whole class of mutability-related bugs from my business logic code.
Working on Java, this used to be nigh-impossible, but the Java 8 additions have truly made my life easier.