In the html such as

<img class="footer-logo" src="{{ institution_logo_url }}" alt="custom institution footer logo" />

You can see that I have alt text but the generated pdf fails the following 2 adobe reader accessibility criteria:

Alternate text should not hide annotation
Other elements that require alternate text

How do I preserve the alt text in html when I generate pdf with princexml in commandline?

Are you enabling a PDF/A profile and using the latest builds of Prince?