Excluded means the image's existing alt text matched one of your Alt text exceptions patterns, so the app deliberately left it alone.
The app ships with six default patterns: featured, #, youtube, vimeo, youtu.be and .mp4. You can review and change these in App settings → Manage Alt text exceptions.
Note that these patterns are matched against the image's existing alt text — not the filename or the image URL — and matching is case-sensitive.