Songs and songwriting are far more simple "wordplay" than some reflection of the singer's real life for the most part. Sometimes I wonder if people really believe that Johnny Cash actually "shot a man in Reno just to watch him die". Singers and songwriters get into a role just as an actor does for the purpose of presenting a point of view that isn't always their own. Young, for example, also wrote one of Waylon's great hits, "Are You Ready for the Country?", so these guys can be all over the map.
I also understand that Young and his long-term wife have an autistic child to whom they are devoted and caring. "Long-term wife" and "devoted to his children" (as well as loyal to his friends) are enough for me to be inclined to look at this guy more positively than the content of all his songs.
Wouldn't surprise me of the majority of his audience in Folsom State prison believed it. .....for no other reason than to make themselves feel better. (But I don't think many people believed that Cash's dad named him "Sue" ;)
Similarly, many folks appear to have personal investments in this non-existent bitter rivalry between Young and Skynyrd. ....to feed their self-righteousness, probably. If a situation isn't black and white - good guy / bad guy - they have a difficult time comprehending it.
Young, for example, also wrote one of Waylon's great hits, "Are You Ready for the Country?",
A song on the same album (Harvest) as "Alabama," in fact. ....and another gem.