Growing up Mormon in the 80s (I got better!), they insisted to us kids that it was just grape juice, and for adults they simply put a social stigma on asking too many questions, or any uncomfortable questions.
If there is a theological principal in play it’s that they view their prophets as still able to receive Bible-level revelations, and if their non-trinitarian God committee tells Joseph Smith that wine is bad now, then wine is bad now. If human nature then results in believers feeling like sinners who need to make it up to their community and their church leaders, then oh so sad, but it can result in the Lord’s work being done.
In general Mormon theology is rather literal and childlike, only getting complicated when trying to work around some established Christian doctrine that no new book overrides (yet!). It’s almost like some provincial huckster was making it up as he went along…