There are contradictory accounts and a fair amount of hearsay. Morrissey claimed in his book that Alain wanted to appear on album covers and was intending to write a memoir. I think the former is gilding the lily around the fact that Alain had started his side project, Red Lightning, just before You Are The Quarry came out. He left the Quarry tour in Europe and video of his last gig showed him to be "not quite right." While there has been no definitive accounting of his departure - barring Boz Boorer writing on his old tour journal (now long gone) that Alain's "illness was apparent" - speculation is that he was severely depressed. He apparently tried (or asked) to rejoin the tour later that fall, which didn't come to pass. Similarly, his songs were used - and he recorded with the band - for Ringleader of the Tormentors, but was not asked to join the tour. That seemingly cemented Tobias as his permanent replacement live. Supposedly, Alain tried to join the recordings for Years of Refusal, but was barred from the studio, despite having provided (again) the lion's share of the co-writes. The rumor is that Boz was sent out to the parking lot to send him off. Fin.
All that said, barring Morrissey's account (to be fair, not the gold standard for unvarnished truth), nothing has been definitively put on the record. Alain's only comments publicly have been to the effect of "things happen for a reason." Whatever transpired, it's a pity.